The best indicator for Southwest Airlines (LUV)
We backtested 20 indicators across daily, weekly and hourly charts on real Southwest Airlines (LUV) history. Here's what actually worked — risk-adjusted, out-of-sample, with costs.
EMA 20/50 Cross
On the daily chart, this is the strongest risk-adjusted edge we found for Southwest Airlines (LUV) over ~46.4 years — trailing buy-and-hold by 0.2% CAGR.
The winner on each chart
Every indicator, ranked
Ranked by Sharpe (risk-adjusted return). Hypothetical, fees included.
| # | Indicator | TF | CAGR | Sharpe | Max DD | Win | Trades | vs B&H |
|---|---|---|---|---|---|---|---|---|
| 1 | EMA 20/50 Cross ✓ | Daily | 12.6% | 0.58 | -66.0% | 38.7% | 93 | -0.2% |
| 2 | RSI Trend (>50) ✓ | Weekly | 10.4% | 0.51 | -61.4% | 40.5% | 121 | -2.3% |
| 3 | Rate of Change ✓ | Weekly | 10.0% | 0.49 | -72.6% | 48.6% | 148 | -2.7% |
| 4 | Bollinger Breakout ✓ | Weekly | 8.1% | 0.48 | -49.7% | 51.2% | 41 | -4.6% |
| 5 | Donchian Midline ✓ | Weekly | 9.6% | 0.48 | -66.5% | 36.6% | 112 | -3.1% |
| 6 | ADX / DMI ✓ | Weekly | 7.7% | 0.45 | -57.5% | 36.1% | 61 | -5.0% |
| 7 | EMA-10 Trend ✓ | Weekly | 8.2% | 0.44 | -61.2% | 43.7% | 206 | -4.5% |
| 8 | CCI ✓ | Weekly | 6.8% | 0.41 | -53.0% | 83.0% | 47 | -6.0% |
| 9 | Donchian Breakout ✓ | Weekly | 6.7% | 0.4 | -70.3% | 33.3% | 39 | -6.0% |
| 10 | Holy Grail Confluence ✓ | Weekly | 5.9% | 0.4 | -46.1% | 86.7% | 15 | -6.9% |
| 11 | MACD ✓ | Weekly | 6.7% | 0.39 | -75.7% | 49.5% | 97 | -6.0% |
| 12 | SMA 50/200 Cross ✓ | Daily | 6.7% | 0.38 | -76.8% | 44.1% | 34 | -6.0% |
| 13 | Rate of Change ✓ | Daily | 6.4% | 0.37 | -69.8% | 39.3% | 758 | -6.4% |
| 14 | EMA 20/50 Cross ✓ | Weekly | 5.6% | 0.34 | -73.7% | 40.0% | 25 | -7.1% |
✓ = held up out-of-sample. Hypothetical, costs included. See methodology.
For Southwest Airlines (LUV), EMA 20/50 Cross on the daily timeframe gave the best balance of return and risk in our test. It still trailed buy-and-hold on raw return — but remember: this is a hypothetical backtest of a standard rule, not a recommendation. Markets change. See the methodology and disclaimer.
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