Will IAG overcome its bearish channel started in Nov 2020?
Updated
Today, the company has passed 0.236 Fib retracement level and now is touching the upper boundary of the bearish channel it's been immersed since Nov 23, 2020.
RSI 14 is about to surpass 70 level, which usually means a change of trend and that would be bad news for IAG's investors. Either technical and fundamental perspective looks bearish. Easter holidays are almost here and covid19 3rd wave has not weakened although it looks like it's going to (at least in Spain it looks like it's changing its trend). Should big player countries such as France, Germany or the UK enforce strict restrictions on flights and mobility once again, IAG would fall again towards 0.5 Fib retracement at least making it very probable to break that support level at 1.50 and go again to historical minimums at 0.97€, with investors worrying about the viability of the company and whether it will really comply with the absorption of Air Europa for €1000 million. If IAG was to back off the deal, that would be a breath for its investors. No signs of that though.
RSI 14 is about to surpass 70 level, which usually means a change of trend and that would be bad news for IAG's investors. Either technical and fundamental perspective looks bearish. Easter holidays are almost here and covid19 3rd wave has not weakened although it looks like it's going to (at least in Spain it looks like it's changing its trend). Should big player countries such as France, Germany or the UK enforce strict restrictions on flights and mobility once again, IAG would fall again towards 0.5 Fib retracement at least making it very probable to break that support level at 1.50 and go again to historical minimums at 0.97€, with investors worrying about the viability of the company and whether it will really comply with the absorption of Air Europa for €1000 million. If IAG was to back off the deal, that would be a breath for its investors. No signs of that though.
Trade active
Certainly it did, but looks like not for long. Expecting it to reenter before Feb 19th. Oil rebounding due to Texas energy crisis is no good news for IAG who will need to preserve 50% of its slots by ghost flights at a higher fuel price. Results are due on Feb 26 and although they might be already discounted in its price, Germany reinforcing border closing with peer countries Czechia and Austria is also not good news for IAG.From a technical perspective, the price has been moving sideways since Dec 18th but one can also envisage a bearish channel started on Nov 23. IAG has recently got out of this bearish channel, trying to touch 1.90 level. Analysts argue that in order to declare a change of trend (to upwards) the price must surpass 2€ level. IAG is now buying Air Europa for 500 million (half price of what was initially established) to be paid in 2024 and covid19 cases in Germany and Spain are decreasing. Those are some good news for the share price. But some media are already talking about a fourth wave? Convulsive times we are living, indeed.
Trade closed manually
Fitur news, covid19 cases decreasing in Spain, Texas crisis easing and requested €150 million by Aer Lingus (subsidiary of IAG) are some of the reasons why I think IAG is going to go up beyond 2€. Therefore, trading is closed.
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