BUZZ-Airlines: traders eyeing shorts as oil begins to stabilise

** Squeeze higher in oil prices sees traders look to go short overstretched airlines sector

** Ryanair falls 4.4 pct despite raising guidance for third time in as many months, easyJet off 4.5 pct - top two fallers on Stoxx 600

** IAG, Air France (Paris: FR0000031122 - news) and Lufthansa also down

** Bigger-than-expected fall in US oil rig count fuelled a frenzy of short-covering in oil on Friday, with Brent up as much as 8 pct

** Falling oil price had been seen as major catalyst for sector outperformance, with the Stoxx Airlines sector up 48 pct in last three months versus a gain of 8.7 pct for Stoxx 600

** Ryanair cautioning on next year's results seen as sign oil price now priced into shares

** Two London-based traders using recent highs in stocks as stops in fresh short positions

** RSIs in Ryanair, Easyjet (Other OTC: EJTTF - news) and IAG all at or approaching 70

** Price chart: http://link.reuters.com/suc93w

(RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)