IAG and Rolls-Royce Share prices are down by more than 5% today becoming the worst-performers in the FTSE 100. The two stocks are trading at 141p and 97p, respectively. Other travel stocks like the Intercontinental Hotels and Whitbread are also struggling.
RR and IAG shares
What happened: IAG and Rolls-Royce share price have been struggling in the past year because of the coronavirus pandemic. With most people staying at home, IAG – the owner of British Airways – was forced to park its planes. Similarly, Rolls-Royce sold and services fewer planes.
The stock prices are falling today in response to news that the Biden administration will re-institute a new ban on flights from most countries, including the UK. This is an important announcement since many analysts believed that global transportation will resume this year as countries reopen their borders.
Rolls-Royce share price is also falling ahead of the important earnings by General Electric; its biggest competitor. Analysts will want to see whether the company has started to see growth in its aviation segment. If it has, it will send a positive signal to Rolls-Royce. Also, RR share price is falling as the company starts headhunting for a new chairman.
Rolls-Royce share price forecast
A few weeks ago, I warned that the Rolls-Royce share price was pointing towards 90p. This trend seems to be forming as shown in the four-hour chart below. The stock is still below the descending red trendline and the 25-day EMA. It is also along the 38.2% Fibonacci retracement level. Therefore, in the near term, there is a possibility that bears will attempt to move to the 50% retracement level at 85p.
RR share price chart
IAG share price prediction
A look at the four-hour chart shows that the IAG share price has broken-out below the vital support at 153p. This was an important support since it was the lowest level in November. It has also moved below the 25-day EMA, which is a sign that bears have prevailed. Therefore, the next level to watch will be the 50% retracement at 134p.
IAG shares chart
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Crispus on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.