Hertz Global Reveals Major Troubles at US Airports

Hertz Global Holdings (HTZ – NYSE)

Thursday, September 26, 2013

Airlines are riding high on a wave of consolidation. But, there subtle indications that investors are being taken for a ride.

Today, we learned that Hertz Global Holdings (HTZ – NYSE) has cut its full-year forecast earnings/share from $1.78-$1.88 down to $1.68-$1.78. They also cut revenues from $10.85-$10.95 billion down to to $10.80-$10.90 billion because of weaker-than-expected volumes in its airport car rental business.

Airline traffic and hotel bookings had a strong summer, but they now face travel spending cuts by both the Federal government and contractors. No junkets means no car rentals. And, theses problems quickly compound for HTZ, as weaker volumes also create fleet-utilization issues.

HTX 092613

Bottarelli Research Tip: Traders have smelled HTZ’ blood in the water for months now, as evidenced by July’s 5x Sell Signal Stack. This latest confirms HTZ downside with a classic double top dropping into another 5x Sell Signal Stack. HTZ has already lost 10%, but we feel that the strength of these signals indicates that those losses will double when HTZ drops to the 61.8% retracement marker at $18.51.

And now, you need to ask yourself how long those airlines will last in the light of this latest evidence? This week in Bottarelli Research LEAPS, we’ll be exploring this very idea. Speaking of LEAPS.....

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