Since bottoming in the end of June, the Air France–KLM stock (EPA: AF) started moving higher and till today it continues to mostly trade above its medium-term upside support line taken from the low of June 21st. This morning, the price broke above one of its key barriers, at 10.71, which is the high of last week, and is now pushing in the direction of next key resistance, at 11.11, marked by the highest point of October. As long as AF remains above the previously-discussed upside line, there is still a good chance for the stock to move up. But in order to get comfortable with higher areas, a daily close above that October high would be needed, hence why we will take cautiously-bullish approach for now.
As mentioned above, if we do see a daily close above the 11.11 hurdle, this may attract more buyers and the price might rise to the 11.35 area, which is the highest point of April. Initially, AF could stall around there, but if the buyers still find the stock attractive even at that price, this could give it another boost. Such a move could help the share price to travel to the 11.76 level, which is the high of February 27th.
Our oscillators, the RSI and the MACD, seem to be in support of the above-discussed scenario. The RSI is above 50 and points higher. The MACD has moved above its trigger line and continues to sit in the positive territory, while pointing higher.
Alternatively, if the price suddenly breaks the aforementioned upside support line and falls below the 10.10 zone, which is the low of last week, this may lead to a test of the 9.75 area, marked by the current lowest point of November. Around there, the stock would also test the 200-day EMA. But if both of these obstacles fail to provide decent support, this could result in another slide, possibly bringing AF to the 9.22 level. That level marks the lowest point of October.
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