Altitude check for “air taxi”

11/12/21
  • BLDE recently broke out of consolidation, challenged record high
  • Stock has pulled back for three days after Monday’s 10% rally
  • Tests of breakout points sometimes attract dip-buying traders

Although the markets are filled with endless surprises, traders with some time in the game tend to notice certain things happening again and again, regardless of the instrument or time frame they’re trading.

One example is the short-term readjustments markets make after big price moves—reversals that often reverse themselves and catch traders leaning the wrong way.

Something like this recently unfolded in Blade Air Mobility (BLDE), a company that allows users to book urban air transport and charter flights through its app (think “air taxi”). While BLDE mostly uses helicopters, it’s made news this year for its plan to use “electric vertical take-off and landing” (eVTOL) aircraft starting in 2026,1 as well as its purchase of organ-transport company Trinity Air Medical.2

The following chart shows that after pulling back from its record high in September (which tested its former high from June), BLDE broke out of a short-term consolidation with a 10% surge on Monday, possibly fueled by buzz in the eVTOL space:3

Chart 1: Blade Air Mobility (BLDE), 5/10/21–11/11/21. Blade Air Mobility (BLDE) price chart. Breakout and pullback.

Source: Power E*TRADE (For illustrative purposes. Not a recommendation.)


At its intraday high of $11.10, BLDE was just $0.89 below its record high. As of yesterday, though, the stock had pulled back around 8% after three-straight down days, and was approaching the approximate level of its breakout.

Although some people would likely view the loss of upside momentum over the past few days as a negation of Monday’s breakout move (i.e., “If the upside breakout really indicated bullish interest, the stock would have kept pushing higher”), longtime traders understand that such pullbacks are, for lack of a better description, run of the mill—part of the ebb and flow of momentum as traders get in and out of the market.

They also understand such givebacks can allow bullish traders to potentially enter a market at a lower level than those who chased prices on the initial breakout—the premise being that, if prices don’t fall too far below the breakout level, it may indicate the buying interest that drove the breakout in the first place is still intact.

Commodities feeling their oats: Inflation always leads to chatter about rising commodity prices, and while gold jumped after Wednesday’s hotter-than-expected Consumer Price Index (CPI) reading, and crude oil’s rally has dominated futures market conversations for months, certain grain futures have rallied just as much—or more—than oil in recent weeks:

Chart 2: December oats (ZOZ1), December wheat (ZWZ1), December WTI crude oil (CLZ1), 9/13/21–11/11/21. Commodity rally price chart. Grain outgains oil.

Source: Power E*TRADE (For illustrative purposes. Not a recommendation.)


Since mid-September, December wheat (ZWZ1) has kept pace with December WTI crude oil (CLZ1), while December oats (ZOZ1) have gained twice as much as crude.

Market Mover Update: Hydrogen fuel-cell stocks jumped yesterday, with Plug Power (PLUG) and FuelCell Energy (FCEL) both rallying more than 7% (see “Climate right for clean energy?”).

Today’s numbers include (all times ET): Consumer Sentiment (10 a.m.), Job Openings and Labor Turnover Survey, JOLTS (10 a.m.).

Today’s earnings include: AstraZeneca (AZN), Warby Parker (WRBY).

Today’s IPOs include: Advanced Human Imaging (AHI), Journey Medical (DERM), Mynaric (MYNA).

 

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1 FlightGlobal.com. Eve partners with Blade to offer US air taxi flights. 6/24/21.
2 MarketWatch.com. Blade Air to Buy Organ-Transportation-Company Trinity Air Medical. 9/9/21.
3 Barron’s. Blade Stock Is Ready to Take Off. 11/6/21.

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