{"id":80045,"date":"2026-03-26T22:12:52","date_gmt":"2026-03-27T05:12:52","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=80045"},"modified":"2026-03-27T11:10:37","modified_gmt":"2026-03-27T18:10:37","slug":"i-am-not-buying-hertz-or-avis-budget-on-tsa-frustrations","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2026\/03\/26\/i-am-not-buying-hertz-or-avis-budget-on-tsa-frustrations\/","title":{"rendered":"I Am Not Buying Hertz or Avis Budget on TSA Frustrations"},"content":{"rendered":"\n

The stock market in this war-driven sell-off<\/a> has offered no place to hide except for a few pockets of speculative activity, and Hertz Global Holdings (HTZ) and Avis Budget Group (CAR) have suddenly become meme stocks attracting heavy trading interest. Money is flocking into these stocks, driven by a narrative that travel disruptions are creating a new source of demand for rental cars. After reviewing both the fundamentals and the technicals, I conclude that I am not buying into this frenzy. In fact, if I had a higher tolerance for risk, I would think about shorting these stocks here, especially CAR. Regardless, these stocks are very dangerous trades to chase given the over-extended technicals and the temporary nature of the supporting narrative.<\/p>\n\n\n\n

Hertz: The Narrative Starts with Search Traffic<\/strong><\/h2>\n\n\n\n

The catalyst for the latest surge in interest comes directly from Hertz\u2019s own reporting. In a March 26 press release<\/a>, the company highlighted a 15% jump in search traffic over the prior week and suggested that travelers may be considering alternative ways to reach their destinations. The company added that one in three customers are currently renting cars specifically for road trips and driving vacations, reinforcing the idea that behavior is shifting in response to ongoing travel disruptions.<\/p>\n\n\n\n

However, it is important to stay grounded in the data and cautiously evaluate suggestions. Hertz pointed to increased search traffic without providing data on bookings, revenue, or utilization. No direct evidence exists that this surge in interest is translating into measurable business performance. Despite this gap in data, the stock reacted strongly, with Hertz rising 9.2% on the day, demonstrating how quickly a narrative can drive price action in the absence of confirmed financial impact.<\/p>\n\n\n\n

Technical Context: Hertz Remains in a Downtrend<\/strong><\/h2>\n\n\n\n

From a technical standpoint, the broader context for Hertz has not changed. The stock is still operating within a longer-term downtrend that has been in place since the middle of last year. The 50-day moving average (DMA) (the red line) continues to act as a guiding resistance level, and the recent move simply brings the stock back toward that same technical boundary. Traders even faded an intraday 50DMA breakout.<\/p>\n\n\n

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Hertz Global Holdings, Inc (HTZ) gained 9.2% after fading back to 50DMA resistance.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n

The surge in trading volume confirms real interest and participation in the stock. Note that the last comparable spike in volume occurred during the November post-earnings surge which marked a peak before the stock resumed its downward drift. The downtrend reflects ongoing difficulties in the car rental business. Today’s temporary travel disruptions will not likely turn things around in a sustainable way.<\/p>\n\n\n\n

TSA Disruptions and the Temporary Nature of Demand<\/strong><\/h2>\n\n\n\n

The underlying meme-trading narrative driving these stocks focuses on TSA disruptions and the resulting frustration among travelers. If consumers are abandoning flights in favor of driving, the implication is that rental car demand could increase. However, the behavior is not sustainable. Travelers would be giving up airline tickets only to rent expensive vehicles and drive long distances while paying elevated fuel costs driven by oil prices elevated by the war against Iran.<\/p>\n\n\n\n

Even if TSA issues persist, the economic trade-offs involved make this shift difficult to hold over time. I doubt there is structural change in how consumers travel.<\/p>\n\n\n\n

Avis: Earnings Context and a Different Starting Point<\/strong><\/h2>\n\n\n\n

Avis provides a useful contrast because its recent experience reflects the impact of similar disruptions under more normal conditions. On February 18, the stock declined 21.5% post-earnings. The company explicitly cited travel disruptions from last year’s government shutdown as a negative catalyst. From the transcript of the earnings conference call<\/a>:<\/p>\n\n\n\n

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“FAA flight reductions, air traffic control disruptions and extended TSA wait times materially reduced discretionary travel as it increased both uncertainty and inconvenience. Commercial rental days went from mildly down in October to down 11% in November. December stabilized but by then, the damage to the quarter was done.”<\/p>\n<\/blockquote>\n\n\n\n

From Avis’s perspective, travel disruptions reduce rental demand and overall travel activity. Plane travel diverted to rental car demand is the consumer’s first step toward reduced overall travel.<\/p>\n\n\n\n

Avis Price Action: Momentum Meets Resistance<\/h2>\n\n\n\n

Despite this context, CAR has participated fully in the recent momentum-driven rally. The stock actually started moving ahead of HTZ with three strong up days before today’s 13.0% surge. Taken together, four consecutive closes above the upper Bollinger Band (BB) have created an over-extended, parabolic run-up. Like HTZ, today\u2019s fade brought the stock back to technical resistance, in this case the 200DMA (the blue line). <\/p>\n\n\n

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Avis Budget Group, Inc (CAR) has gone parabolic over the last week.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n

Short Interest and the Mechanics of a Squeeze<\/h2>\n\n\n\n

High levels of short interest are likely one of the key factors amplifying the surges in HTZ and CAR. Bears have sold short 21.4% of CAR’s float<\/a> and 20.2% of HTZ’s float<\/a>. This crowding creates conditions for a short squeeze, where rising prices force short sellers to panic into covering positions, adding further buying pressure and accelerating the move. The presence of a compelling narrative is often enough to sustain momentum, even in the absence of supporting fundamentals. The narrative here is a “meme-ified” reaction to the prospect of each company generating incremental revenue from frustrated travelers.<\/p>\n\n\n\n

The combination of elevated short interest and the simple, easy-to-understand story of travel chaos leading to increased car rentals has transformed these stocks into momentum-driven trades. This dynamic explains the intensity of the recent moves but does not validate the underlying thesis.<\/p>\n\n\n\n

Testing the Data: Google Trends and Search Validation<\/strong><\/h2>\n\n\n\n

To evaluate Hertz\u2019s claims more directly, I turned to publicly available data using Google Trends. By examining search activity for both Hertz and Avis<\/a>, it is possible to verify whether interest has increased, how it compares across companies, and make some projections about the current trends. For this analysis I analyzed the search terms as companies, but the topic and word based analysis gives similar results.<\/p>\n\n\n

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\"Google<\/a>
Google trends – Avis Car Rental vs Hertz, the impact of the DHS shutdown after February 14, 2026<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n

The data confirm that search interest in Hertz increased following the February 14 government funding halt for the Department of Homeland Security (DHS) that triggered TSA disruptions<\/a>. However, Avis did not benefit. This discrepancy raises additional questions about whether Hertz’s experience is sustainable.<\/p>\n\n\n\n

Search Interest Is Not Business Performance<\/strong><\/h2>\n\n\n\n

Importantly, we must distinguish between search interest and actual economic activity. Higher search volumes do not guarantee increased bookings, higher utilization, or improved revenue. Travelers may have explored Hertz and chosen a different car company for the final purchase. For whatever reason, Hertz is a preferred starting point (at least over Avis). <\/p>\n\n\n\n

Additionally, the trend in search interest shows signs of weakening. While there was a clear increase for Hertz following the onset of TSA disruptions, the trajectory now appears to be flattening and potentially reversing. Search interest for Avis has already returned to pre-February 14 levels. Search interest for Hertz looks ready to follow. Thus, the initial surge already looks temporary.<\/p>\n\n\n\n

Broader Trends in Rental Car Searches<\/strong><\/h2>\n\n\n\n

Looking beyond individual companies, broader search trends for car rentals show a similar pattern. There was a small increase in interest for the search term “car rental” beginning shortly before the February 14 disruption and continuing higher in the immediate aftermath. However, the general search interest clearly peaked on March 6 and has trended lower. In fact, search interest is now back to levels last seen on February 9. <\/p>\n\n\n

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\"Google<\/a>
Google trends – car rental, interest has declined back to pre February 14 levels after peaking on March 6<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n

This broader context supports the view that the current narrative is tied to a specific moment rather than representing a sustainable shift in demand or even a material impact on the rental businesses.<\/p>\n\n\n\n

Technical Setups and Trade Implications<\/strong><\/h2>\n\n\n\n

From a technical perspective, both stocks present precarious setups. CAR appears significantly overextended and could set up as a short candidate, but the high level of short interest increases the risk of being caught in a continued squeeze. A better risk\/reward entry may appear after the stock closes below today’s low ($121.61). HTZ has less room to the downside. A complete reversal of today’s candle basically takes HTZ back to its previous trading range, hardly a compelling point to initiate a short position.<\/p>\n\n\n\n

For both stocks, the combination of elevated volatility and strong narrative-driven momentum creates a difficult environment for positioning. Any trade, long or short, would require careful risk management, particularly given the potential for rapid and unpredictable price movements.<\/p>\n\n\n\n

Conclusion: I Am Not Buying<\/h2>\n\n\n\n

Taking all of the data together, I do not see a compelling case for buying HTZ or CAR here. The current surges are driven by a temporary disruption, amplified by market mechanics such as short interest and momentum trading, rather than a durable improvement in the underlying business. I am not buying HTZ or CAR.<\/p>\n\n\n\n

Full disclosure: no positions<\/p>\n\n\n\n

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