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Airways may get billions extra aid, nevertheless it may not be sufficient, merchants say

Airline shares have risen again, with new hopes of additional relief for the dejected group.

United Airlines, Southwest, Delta, American Airlines and JetBlue rose this week as several Republican senators asked for another $ 25 billion in incentives. They joined President Donald Trump and more than 200 house legislators to raise funds for industry to offset the pandemic's falling demand.

Travel stocks also got a boost after the State Department lifted a global health recommendation for US citizens traveling internationally.

"Airlines are strategically important to the nation, and I think you see policy makers reflect this," said Steve Chiavarone, Federated Hermes' portfolio manager, on Thursday in CNBC's "Trading Nation."

He said improved air traffic in the past few months had been a plus, but noted that it was well below normal.

According to the agency, more than 20 million travelers passed the TSA checkpoints in July. However, this was about a quarter of the traffic compared to the previous year.

"You don't want the damage to be so permanent [for the business] … that when you're back to normal you can't run the airlines and this further limits your recovery. I think it makes sense [for] [$ 25 billion] are enough? who knows? you may have to come back for another round, "Chiavarone said.

The airlines had already received $ 25 billion in incentives through previously approved aid. This round limited layoffs until the end of next month.

Matt Maley, chief market strategist at Miller Tobacco, said the charts have highlighted a wild ride for the group in recent months.

"Look at the XAL, which is a broad index of airline stocks," said Maley in the same Trading Nation segment. "The group was obviously hit much more than anything, and when it recovered – for example, Delta recovered 90% – everyone thought: & # 39; Oh my god, what a great opportunity & # 39; but then she calmed down again a lateral reach. "

The same pattern was repeated in early June when the group broke higher but has since moved to a different side area, he said.

"The positive thing is that the area we're in now is the second area we're in at a higher level, so we're seeing a higher low and that's a good sign," said Maley. "If the group can move above their July highs it will be positive … and if they can break through their June highs it will give them a lot of momentum."

The XAL Airline Index peaked at 74.46 in early June. It is currently trading at 54.47.

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