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IAG Share Price Forecast: Don’t Jump On The Train Yet

IAG ((LON: IAG) share price has had a massive bounce since our last week’s analysis. Since then, the shares of International Consolidated Airlines have surged 11%. The stock started this week with a pullback as the price is back below 150p. Despite a strong bounce, the price is still trading below a key trendline.

On Monday, shares of most UK airlines showed a negative price action, although FTSE 100 index gained 45 points. IAG shares also remained red after a decline of 2% during the first trading session of the week. Till press time, the stock of the British Airways owner was trading at 147.85p.

Barclays Upgrades LON: IAG Outlook

International Consolidated Airlines (IAG) shares are currently trading almost 15% below their YTD highs. Despite this massive drop in the last two months, Barclays has revised IAG shares outlook from equal-weight to over-weight. This is because the analysts at Barclays expect the travel demand to stay elevated throughout the summer. Just recently, Deutsche Bank also revised its outlook on the stock from ‘hold’ to ‘buy.’

It is also worth mentioning that the outlook of EasyJet has also been upgraded by Barclays. This shows that the airline industry is expected to remain profitable this year. This is surprising for many investors, who were previously expecting a decrease in air travel due to prevailing recession fears.

IAG Share Price Needs To Break Above 156p

Even though LON: IAG is currently up 11% from its March lows, the price still needs to reclaim the 156p level. This level comes from multiple confluences. Firstly this level lies above the upward trendline, which was recently broken. Secondly, this also aligns with the 0.618 Fib retracement level, which acts as the line in the sand for many traders.

IAG share price forecast will become bearish if the price gets rejected from the trendline and fails to break above it. This may lead to another retest of the 200-day moving average. The upcoming rate hike decisions from the BoE will play a key role in the future price action of airline stocks.

IAG share price chart
LON: IAG Chart