There is no doubt that the coronavirus pandemic had crippled the global airline industry, forcing some major airlines to seek government support. It is a real battle going on right now among big European airline companies, which accuse each other of not playing by the books, when trying to strike bailout deals with their home governments. However, the tensions have eased a bit, due to most of the European states relaxing their lockdown measures and allowing certain flights to be commenced.
Looking at the Air France – KLM’s stock (EPA:AF) from the technical perspective, we can see that the current market positivity is spilling into AF’s trading activity. The share price started climbing higher and forming higher lows. Today, the stock is testing last week’s high, at 4.505 and at the same time, it is balancing above a short-term tentative upside support line taken from the low of May 25th. For now, we will take a bullish approach and aim for higher areas, especially if AF breaks above last week’s high.
A strong push above the previously-discussed 4.505 barrier would confirm a forthcoming higher high and may invite more buyers into the game. The stock could then “fly” to the 4.716 obstacle, or even the 4.921 zone, marked by the high of April 17th, where AF might stall temporarily. If investors still see value in the stock around that price, this may provide the share price with another boost, possibly sending it towards the 5.336 level, marked by the high of April 14th.
The RSI and the MACD seem to be supporting the above-discussed scenario. The RSI is above 50 and points higher. The MACD had just moved fractionally above its trigger line, while continuing to float above zero.
Alternatively, if a break of the aforementioned upside line occurs and the price falls below the 4.036 hurdle, which is yesterday’s low, that may spook new investors from entering anytime soon. The stock could then drift to the 3.850 and 3.762 levels, which mark the low of May 26th and the high of May 25th. If there are still no new buyers in sight around that area, a further drop may take AF to the 3.500 zone, which is the lowest point of this year, so far.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.