Southwest Stock Eyes Fifth Straight Win After Upgrade

LUV is heading toward its highest close since March

The shares of Southwest Airlines Co (NYSE:LUV) are up 2.2% to trade at $56.17, after Macquarie upgraded the airliner to "outperform" from "neutral." The analyst in coverage touted the company's new revenue management system, which could boost efficiency once the grounding of its Boeing 737 Max fleet ends.

Should today's price action hold, Southwest stock will have accomplished a lot today. For starters, it would be a fifth straight win and the equity's best week since July 2018. A historical outperformer in September, LUV is up 7.2% this month and now eyeing its highest close since March. Lastly, the shares are set to take out the $55 level on a closing basis today, an area that turned away rallies in April and July.

The door is wide open for more bullish analyst attention that could keep the wind at the security's back. There are 17 analysts covering LUV, and 10 rate the stock a "hold" or "strong sell." In addition, the consensus 12-month price target of $59.82 is just a slim 7.2% premium to last night's closing perch at $54.98.

Now might be the time to speculate on Southwest's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 22% is in the 10th percentile of its annual range. This means near-term options are currently pricing in relatively low volatility expectations.