by Ian Cooper

Keep an eye on oversold airline stocks.

As noted by CNBC, “Summer air travel is expected to soar. The Transportation Security Administration screened a high of 2.99 million individuals on Sunday, June 23 – exceeding a record set just weeks earlier on May 24 – aand the TSA is forecasting a record-setting July 4 holiday period. TSA expects to screen more than 32 million travelers in all between Friday, June 28, and Monday, July 8, a 5.4% year-over-year increase in travel for the holiday.”

In addition, about five billion people are expected to fly this year, which could result in another record year for the sector. And three, according to the International Air Transport Association (IATA), 2014 revenue could reach $996 billion this year.

All of which could fuel further upside for airline stocks, such as:

United Airlines (UAL)

After a recent pullback from $56 to $47.50, UAL is starting to pivot higher again.

Last trading at $48.66, we’d like to see UAL retest its prior high of $56, near term. Helping, Citi analysts just raised their price target on UAL to $96 from $80, with a strong buy rating. Jefferies upgraded UAL to a buy rating with a price target of $65. And Wolfe Research just upgraded UAL to an outperform rating.

JetBlue (JBLU)

JetBlue (JBLU) is also starting to break higher. From its last traded price of $6.09, we’d like to see it retest $7.50 resistance. Billionaires also seem to be taking advantage of recent weakness in JBLU, too. Carl Icahn bought 17.73 million shares at $6.49 at the end of March. Israel Englander’s Millennium Management increased its stake in JBLU by nearly 750%.

US Global Jets ETF (JETS)

Or, if you’d rather diversify at a lower cost, check out the US Global Jets ETF (JETS).

With an expense ratio of 0.60%, the ETF diversifies with airline operators and manufacturers all over the world. Some of its top holdings include United Airlines, Delta Air Lines, American Airlines, Alaska Air Group, JetBlue and Boeing.

Last trading at $19.66, we’d like to see the ETF rally back to $21.50 initially.