First post ever on Southwest Air [LUV]

I like to fly Southwest.  It is nothing fancy or magical, it simply doesn't suck.  But there can be no doubt that its shares have taken flight since the 2009 lows and since late 2014 the really got a kick in the pants with cheap oil.

So it's all blue skies and sunny days for LUV investors I guess...

The only problem is that the EW chart is hanging over it with a growing storm cloud of negative probability.  My primary model says that they are likely forming a 5th of 3 or 5th of C which should take another 3 weeks to occur but at anything near $50 I will be snapping up the 2017 $28 puts for a song and then looking for a big pullback to the level of the prior 4th as shown.

That would be a normal pullback under Avi'smodel that we are in the final stages of a 3rd wave.  Conversely, if the Prechter-crash happens then everything will be sold to pay margin calls so the pullback could be much much lower.  Also, once oil prices bottom there is no place for the airlines to go but down.

The shares recently peaked at ~ $47.10 and then pulled back to $42.15 in what looks more corrective than motive.  So unless the shares suddenly fall below $42 I would assume another wave up, probably to test a level close to $50, before the downside begins.

Note that if the current wave is a 3rd that I expect the 4th to be an inverted vee back to ~28 because the EW guideline of alternation would kick in given that red 2 was sideways.  So it would indeed be the right place to buy 2017 puts if ever there was one.