The Irish low-cost airline company did not have a good year in 2018, as the firm suffered from rising fuel costs and several employee strikes. We saw the Ryanair Holdings Plc (NASDAQ: RYAAY) sliding heavily, especially in the second half of 2018. This January, the company has issued a future profit warning, where it blamed the strong competition, which it had to face during the holiday season, with the falling numbers in passengers. That said, some investors may see this as positive and could jump into it right now, as it may present a good short-term opportunity to take advantage of the lower price, given that the Irish airline company still has a strong presence in Europe and that it is still able to compete with other low-cost airlines on the old continent.
From the technical side, given that RYAAY has now broken its medium-term downside resistance line, taken from the high of July 18th, the near-term outlook shifts from negative to neutral, in our view. The stock needs to break through one of the key resistance levels first, in order for us to aim towards slightly higher levels.
A push higher and a break above the 73.33 resistance barrier could once again spark interest among investors, or even introduce new ones, who could try to join in the action. The share price could then get lifted to the 77.00 hurdle, which, from the beginning of October till the beginning of December, acted as a good area of support, but now it may take the role of resistance. However, if there are more investors joining in the bandwagon, RYAAY could easily travel to the 84.40 level, marked by the high of November 23rd.
Taking a quick glance at our oscillators, the RSI is very close to breaking above 50, because after bottoming in mid-December, the indicator kept pushing higher and continues to point in the upwards direction. The MACD is also somewhat supportive of the above-discussed idea, as it is also pointing higher, sitting above its trigger line, although still being below zero.
On the other hand, a drop back below the aforementioned downside resistance line could make investors worry again, as it may increase the chance of seeing a roll-over in the price. But if the stock starts falling below January’s low, at 65.60, this is where it could become ugly for the company again, as more downwards pressure could appear, dragging the share price towards the 62.53 obstacle, marked by the lowest point of February 2015. A further decline might set the stage for a test of the 57.50 zone, which back on October 28th, 2014, acted as the high of that day.
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