The arrival of Spring and the vaccination process encourages the tourism sector
Since the beginning of the pandemic, the worst-hit sector has undoubtedly been the tourism sector, dragging the main airlines to trade at seriously lows, causing problems in the viability of many of these companies.
The pandemic and the measures taken to stop its expansion at a global level, caused a drastic decrease in the number of flights, with only light during the summer months, which caused heavy losses in many companies. So giants like Air France KLM have been forced to ask for public aid, receiving bailouts after losing 7.1 billion euros in 2020.
Other companies such as IAG, chose to carry out a capital increase in order to shore up their solvency and liquidity levels without the need to request any rescue. Even strong companies, such as the holding which unites Iberia and British Airways lost 6.92 billion euros compared to a profit of 1.715 million during 2019.
Despite this, the beginning of the vaccination process and the arrival of the end of winter in Europe is encouraging this sector. Over the last few days, we have seen strong rises in financial markets, as expectations for the future and optimism floods the markets after the United Kingdom announced that from May it would allow its citizens to travel abroad.
IAG Analysis
IAG held up best in recent months, thanks to the significant volume of liquidity it had during the past year, due to the capital increase it carried out last September.
Technically speaking, over the last year, it has been heavily punished, setting lows below even 90 GBX, but after experiencing a recovery during the month of November, the price has moved through a wide lateral range.
Last February, it experienced a sharp rise which led it to finally exceeding the high band of the channel in green, after exceeding 200 GBX per share and its average of 200 sessions, which gives it wings to search your next level of resistance.
Source: IAG daily chart of Admiral Markets MetaTrader 5 platform from October 25, 2019 to March 1, 2021. Taken on March 1 at 12:55 CET. Note: Past performance is not a reliable indicator of future results, or future performance.
Price evolution of the last 5 years:
- 2020: -61.40%
- 2019: 1.20%
- 2018: -5.07%
- 2017: 47.65%
- 2016: -27.78%
Air France-KLM Analysis
If we look at the daily chart of this company, we can see how after marking a minimum on October 30, the price began an upward trend that led it to exceed its average of 200 sessions, forming at that time a formation of triangular consolidation.
After the rebound in recent days, the price has managed to break up this formation, exceeding last November’s highs, opening the doors for the price to seek its next resistance level of 6.48 euros per share. The breaking of this level could give wings to this company to seek new highs around 8 euros per share.
Source: Air France-KLM daily chart from Admiral Markets MetaTrader 5 platform from November 5, 2019 to March 1, 2021. Taken on March 1 at 1:00 p.m. CET. Note: Past performance is not a reliable indicator of future results, or future performance.
Price evolution of the last 5 years:
- 2020: -48.41%
- 2019: 4.68%
- 2018: -30.19%
- 2017: 162.47%
- 2016: -26.30%
Deutsche Lufthansa Analysis
If we focus on Lufthansa, we can see that in 2020 it suffered a sharp decline from €15 per share in February to a yearly low of around €6.80 per share. During the last quarter, after the announcement of the Pfizer and Moderna vaccines, its price began an upward trend following a channel formation, which has led not only to its 200-session moving average, but also to seeing it exceed the level.
The good prospects for the future and the overcoming of these resistance levels, open the door for the price to continue with its upward trend, although we must be attentive to its behaviour when reaching the upper band of the bullish channel, since it could do a downward bounce to seek support at its 18-session moving average which is currently its first support level.
Source: Lufthansa daily chart from Admiral Markets MetaTrader 5 platform from November 7, 2019 to March 1, 2021. Taken on March 1 at 1:10 p.m. CET. Note: Past performance is not a reliable indicator of future results, or future performance.
Price evolution of the last 5 years:
- 2020: -34.10%
- 2019: -16.70%
- 2018: -35.87%
- 2017: 150.36%
- 2016: -15.75%
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