After reversing sharply to the downside around mid-February, the Air France-KLM stock (EPA: AF) found support near the 3.800 hurdle on March 16th, from which it rebounded a bit. From then onwards, the share price started moving sideways and today we are seeing that AF is coiling up. It is stuck between two lines – an upside one taken from the low of March 19th and a downside one drawn from the high of March 25th – this way forming a symmetrical triangle, clearly visible on a 4-hour chart. For now, we will stay neutral and wait for the stock to exit that formation and then break one of the highlighted levels, in order to get comfortable with a further directional move.
If the share price exits the pattern through its lower side and then falls below the 4.650 hurdle, which is the low of March 30th, this may open the door for AF to move a bit lower. We will then target the 4.250 obstacle, a break of which could set the stage for a move to the 3.800 level, marked by the current lowest point of this year.
The RSI and the MACD on our 4-hour chart seem to be flat, at the time of writing. The RSI is oscillating around 50 and the MACD is doing the same around its zero line. Both indicators currently support the idea of staying neutral, at least for now.
On the upside, if the stock exits the symmetrical triangle through the upper bound of it and then breaks above the 5.484 barrier, marked near the highs of March 13th and 25th, that move may attract more buyers into the game. This could help lift AF further north, initially aiming for the 5.858 obstacle, a break of which could send the share price to the 6.384 zone, marked by the high of March 5th. The stock may stall around there temporarily, but if the buying-interest is not easing off, a break of that zone may send AF to the high of March 3rd, at 6.906.
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