American Airlines closed up 5.55% yesterday, and United Airlines rose nearly 7.84% — the ceasefire between the US and Iran, coupled with expectations of the reopening of the Strait of Hormuz, caused oil prices to plummet, leading the market to reprice jet fuel costs.

American Airlines also benefited from a positive spillover effect from Delta's better-than-expected Q1 earnings report, breaking through its nearly one-month consolidation range on the same day. Short-covering pressure cannot be ignored — short interest accounts for 8.7% of the float, and Call option volume surged to 5 times the average on that day. UAL has stronger short-term momentum. Although TD Cowen lowered its target price to $120 in early April, Goldman Sachs maintains a Buy rating, indicating fundamental support remains.

The key observation points are whether the strait will close again and if negotiations break down, as the subsequent narrative on fuel costs could reverse quickly 😥