I Predicted the IAG Share Price Take Off. What Next?

IAG share price has taken off. The stock surged to a high of 137p, which was the highest level since May this year. It has climbed by over 50% from its lowest level this year. This makes shares of the British Airways parent company some of the best performers in the FTSE 100. It remains about 23% below the highest level this year.

Why is IAG cruising?

IAG is one of the biggest airline groups in Europe. The company owns some well-known brands like British Airways, Iberia, and Aer Lingus. Therefore, the firm has benefited from the ongoing recovery of the aviation sector. While prices have remained high, airlines have continued reporting strong demand. Analysts expect that the sector will do well in the coming months as business travel rebounds.

IAG business is booming. In the first nine months of the year, the company’s total revenue came in over 16.6 billion euros, which was much higher than last year’s 4.9 billion euros. As a result, it managed to move from a 2.4 billion euro loss to a profit of over 770 million euros. All its airlines were profitable during the period. The firm expects its pre-exceptional operating profit for the year to be about 1.1 billion euros.

Therefore, there is a likelihood that IAG will continue doing well in the coming months as business and recreational travel rebounds. Its capacity is expected to reach about 90% of 2021 level in the fourth quarter. 

IAG share price forecast

My last prediction on IAG stock price turned out to be accurate. At the time, I wrote that the shares had formed a falling wedge pattern, which is usually a bullish sign. Recently, the stock has managed to move above the upper side of the wedge pattern. In price action analysis, this pattern is usually a bullish sign. It has moved above all moving averages while the Stochastic Oscillator has moved above the overbought level.

Therefore, the shares will likely continue the bullish momentum as buyers target the key resistance level at 150p. A drop below the support at 125p will invalidate the bullish view.

iag share price