Detailed Technical Analysis: American Airlines Group, Inc. (AAL) as of July 11, 2025

1. Market Overview and Recent Price Action

• Current Price: $12.22
• Last Two Sessions: July 10 close at $12.94 after a surge from $11.48 (July 9). July 11 has seen a retracement, closing at $12.22 after hitting an intraday high of $12.90.
• Volume: Hugely elevated on July 10 (148.9M shares traded), with the price spiking. July 11 saw a heavy opening (23M+) and robust volume throughout, but with an overall downward drift after the surge.

2. Trend Analysis

• Short-Term: Strong uptrend established on July 10, confirmed by the highest volume in months. Price moved from $11.48 to intraday $13.18 before closing at $12.94—a breakout.
• Today’s Action: The stock gapped down on July 11, opening near $12.81, but was unable to hold higher levels, with lower highs and lower lows throughout the session—a classic bearish reversal pattern after a strong run-up.
• Medium-Term: The stock has moved from a May base at ~$9.50 to >$12—an impressive 30%+ rally in less than two months. This is approaching overbought territory on the daily.

3. Chart Patterns and Candle Structure

• Bearish Engulfing and Shooting Star: The July 10 candle is a massive white body with a long upper wick (high $13.18, close $12.94), and July 11 is a long red candle with an intraday high failing to break the prior high and closing near lows, forming an ["bearish engulfing"/“abandoned baby”] pattern on the daily. This often precedes a short-term pullback.
• Gap Fill: The gap between the July 9 close ($11.48) and July 10 open ($12.30) is partially unfilled. Momentum players may target that region on a retracement.

4. Volume & Participation

• Volume Spike: Historic volumes on July 10/11, characteristic of a buying climax. The inability to hold new highs on July 11 despite continued heavy volume is a red flag for near-term bulls—distribution is suspected, as late buyers are trapped.

5. Moving Averages

• Short-Term (5, 10, 20 Day SMAs/EMAs):
  • 5-Day SMA ~ $11.68 (approximation via past closes).
  • 10-Day SMA ~ $11.32.
  • Price has extended well above these averages, suggesting extended/overbought conditions.
• Mean Reversion Probability: High, especially after a vertical climb.

6. RSI & Momentum Oscillators

• RSI (Estimated):
  • Based on momentum of last 14 sessions: Up days outweigh down, RSI likely over 73 (overbought zone).
• MACD:
  • MACD Histogram would show wide separation, but after today's reversal, a bearish cross is likely to develop in the next 1–2 sessions.

7. Support and Resistance Levels

• Immediate Resistance: $12.95–$13.18 (yesterday’s high and rejection area).
• Current Price: $12.22—failed to break above $12.90 intraday today.
• Immediate Support:
  • $12.00 (psychological and round number level)
  • $11.70–$11.80 (recent consolidation pre-breakout)
  • $11.40–$11.50 (gap midpoint/fill, strong institutional reference)
  • $10.95–$11.10 (prior swing resistance, now support)

8. Bollinger Bands

• Price on July 10 punched through the upper Bollinger Band; July 11’s action brought it back inside, which is another classic mean-reversion sign. Historical volatility bands are wide—another hallmark of a near-term top.

9. Fibonacci Retracement

• Move: $11.00 (low July 9) to $13.18 (high July 10) = $2.18 rise
  • 38.2% retrace: $12.34
  • 50% retrace: $12.09
  • 61.8% retrace: $11.85
• Today closed below the 38.2%, heading toward the 50% retrace zone. Highly likely the correction continues to at least $12.09 or $11.85.

10. Order Book/Market Psychology

• The initial breakout likely caused short covering and FOMO buying; July 11’s failure to extend gains will cause late longs to become anxious, probably triggering stop-losses and fast selling.
• The high volume at lower prices intraday suggests smart money is distributing, not accumulating at current levels.

11. Volatility Indicators

• ATR: Surged, suggesting wide price swings—ideal for short-term reversal trading or short setup post-climax.
• VIX surrogate (implied from price swings): Risk still elevated; sharp range contraction expected after such a spike.

12. Elliott Wave Context & Seasonality

• The last two-day move is classic of a Wave 3 of 3 completion—next expected is a correctional wave (Wave 4). Additionally, mid-summer travel stocks often soften after a pre-summer buying wave.

13. Putting it all together: Strategy and Decision

• The evidence from multiple technical tools (volume climax, reversal pattern, overbought RSI, break of retracement levels, upper Band punch, and failure to hold highs) points to a high-probability SHORT setup.
• The most likely scenario is a continued pullback toward the $12.10 and potentially $11.85–$11.70 level over the next 24 hours as bullish excess is further unwound.
• There is a risk of short-term bounce at $12.10 but, given distribution and technicals, risk/reward strongly favors a SELL/Short entry.

14. Trade Setup

• Sell short between $12.22 and $12.25 (current after-hours price and prior close).
• Target $11.85 (50-61.8% retrace of surge); if momentum is strong, secondary target $11.70.
• Tight stop above $12.50 (recent intraday support turned resistance), to guard against squeeze attempts.

Final Summary

With multiple confirming signals of a bullish reversal and exhausted upside momentum, the optimal trade is to SELL (short) AAL at current prices, targeting further mean reversion toward the $11.85 region. Wait for any small intraday pop toward $12.25 for an optimal entry to maximize risk/reward.