How to Trade Lufthansa’s 19% Surge Amid Post-Covid Travel

February 15, 2022 18:11

Shares in airline stocks such as Germany’s Lufthansa had a tough time before and during the pandemic. From January 2018, Lufthansa’s share price collapsed more than 75% to lows not seen since 1993! 

However, the stock has stabilised and is now presenting some very interesting characteristics for long-term, value-based investors. With post-Covid travel set to rise, it may be time to look at airline stocks once again.  

Learn more about how to trade Lufthansa below.  

Stock: Deutsche Lufthansa AG
Exchange: ETR
Symbol for Invest.MT5 Account: LHA 
Date of Idea: 15 February 2022
Time Line: 3 - 12 weeks
Entry Level: €7.80 
Target Level: €12.40 
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Why Trade Lufthansa? 

According to data from Fitch Ratings, the global revenue passenger in kilometres metric is set to grow over the next few years and reach pre-pandemic levels in 2024. As air travel picks up, this could help airlines such as Lufthansa who also own Austrian Airlines, Swiss International Air Lines, Brussels Airlines and Eurowings.  

Analysts Begin to Upgrade Sectors Which Struggled Over the Pandemic 

At the beginning of the year, analysts at Citigroup upgraded Lufthansa from a ‘sell’ rating to a ‘buy’ rating. This was also followed by Exane BNP Paribas, Goldman Sachs and UBS upgrading the stock from ‘underperform’ and ‘sell’ to ‘neutral.’ It seems the reasons to be bearish on the company may have bottomed out.  

Citigroup highlights that long haul airlines are likely to outperform short-haul airlines due to the potential increase in post-Covid air travel, a resurgence in the cargo business, a recovery in corporate travel and the reopening of travel in the Asia Pacific region.  

Standard & Poor’s also changed its outlook on the airline from negative to stable which is another positive sign that the recent woes have potentially subsided. As the company used proactive cash management measures over the pandemic and received a loan from the government, the airline is now looked at more favourably among credit rating agencies.   

Passenger Air Traffic is Forecasted to Recover 70% of the Pre-Pandemic Level 

According to Standard & Poor’s research, demand in air passenger traffic should recover up to 70% of the pre-pandemic level. Most analysts are bullish on the prospects of a recovery in global air passenger traffic albeit at a much slower pace than before the pandemic.  

Lufthansa is already planning to deploy 65% of its 2019 capacity in the first quarter of 2022 with an aim to reach 80% in the second half of the year. In fact, only last week Lufthansa achieved its second strongest bookings since the start of the pandemic.  

The airline is already considering using its Boeing 747 jumbo jet for its two-hour trips to Palma de Mallorca airport due to a huge surge in bookings over Easter. Last year, Eurowings had a 700% increase in bookings when the island was taken off Germany’s Covid risk list highlighting the eagerness of airline travellers.  

Lufthansa’s Share Price Shows a Bullish False Breakout Pattern 

Source: Admirals MetaTrader 5LHA, Weekly - Data range: from 15 Apr 2018 to 15 Feb 2022, performed on 15 Feb 2022, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. Past five-year performance: 2021 = -19.93%, 2020 = -34.10%, 2019 = -16.70%, 2018 = -35.87%, 2017 = +150.37%.  

In the weekly chart of Lufthansa’s share price shown above, the price action has consolidated between €12.60 and €6.94 creating a trading range, as shown by the two black horizontal lines.  

The price did break through the bottom of this trading range in September 2021. However, the downside was limited and the price action is now back inside of the trading range, highlighting a false breakout.  

Now that the price is back inside of the trading range and has been retesting the bottom horizontal support line, it could serve as an area for buyers to build upon.  

An Example Trading Idea for the Deutsche Lufthansa Share Price

An example trading idea for the Deutsche Lufthansa’s (LHA) share price could be as follows:  

  • Buy the stock on a break above €7.80 
  • Target the top of the trading range at €12.40.    
  • Keep your risk small at a maximum of 5% of your total account.   
  • Time Line = 3 – 12 weeks  
  • A move to the top of the trading range would result in a near 19% potential gain.  

It’s wise to remember that the share price is unlikely to go up in a straight line and it may even go much further down before it rises. While travel restrictions are being lifted around the world, there are still some limitations that could impact any recovery. 

The Russia-Ukraine crisis may also have an impact on general risk sentiment. Therefore, be sure to exercise good risk management which is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade and the risks involved.  

How to Buy Lufthansa Shares in 4 Steps 

With Admirals, you can buy shares in German companies like Lufthansa with a low commission of just 0.1% of the trade value and a low minimum commission of just EUR 1.0.   

  1. Open an account with Admirals to access the Trader’s Room.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for Lufthansa (LHA) at the bottom of the Market Watch window and drag the symbol onto the chart.   
  4. Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.   

Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance. 

Click on the banner below to buy Lufthansa shares today! ▼▼▼ 

Do You See the Lufthansa Share Price Moving Differently?  

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance that Lufthansa’s share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.  

This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article. 


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.