South American Airlines Are Confirming Brazil's Growth

It sure would seem fishy for Brazilian stocks to rebound as sharply as they have off a presidential bribery scandal earlier this year and not be supported by a rise in airline routes across not only South America, but up to North America, as well. While it is true that, historically, the American-based airlines have not telegraphed U.S. growth particularly well, in the case of emerging markets we are talking about raw growth and easily-digested data points regarding an increased in flight paths. 

And, fortunately for Brazil bulls, South American airlines are as hot as can be. 

LTM and CPA are some of the relatively larger cap South American airlines, and both are sporting strong technicals. But beyond them, smaller airlines like AZUL GOL AVH are all notably strong this morning as Brazil (EWZ country ETF) outperforms, once again. 

AVH, in particular, is one to watch going forward, given its geographical location. Avianca is based in Panama, which essentially links Central and South America. If the growth in these countries continues, then this smaller cap airline ought to be growing somewhat in lockstep with nice upside. 

On the AVH daily chart, below, a break and hold over $8 this autumn should give South America bulls another notch in their belt, let alone actionable trade idea.