The IAG share price has been struggling to find direction in the past few weeks. The British Airways parent stock is trading at 170.90p, which is slightly below May’s high of 220p. It has risen by about 16% this year and outperformed the aviation sector ETF (JETS), which has risen by about 4%.
IAG recovery goes on
IAG and other airlines like Ryanair, Wizz Air, and EasyJet have done relatively well this year. The companies have seen a significant increase in bookings as more countries have reopened. However, with the Delta variant rising, there is a possibility that this growth will slow down in the remaining part of the year.
In a report last week, IAG said that it carried more than 5.4 million customers in the second quarter of 2021. This was a remarkable increase from the same quarter in 2020 of 508,000. This growth happened in most of its regions except Asia & Pacific. For example, its domestic business saw more than 2.9 million passengers, up from 147k in the same quarter in 2020.
The IAG share price also reacted to the firm’s interim half-year report. The firm’s revenue rose to more than 2.2 billion euros while its total loss after tax was more than 967 million euros. Its operating loss was more than 2 billion euros.
With no data expected in August, investors will continue reacting to the developments on Covid-19. In July, the UK allowed flights from the US. However, with cases rising in the US, and with states mandating vaccinations, there is a possibility that the country will maintain its ban on European flights. Still, any signs of improvements will be welcomed by investors.
IAG share price forecast
Turning to the daily chart, we see that the IAG stock price has been under intense pressure lately. It has dropped by more than 22% from its highest level this year. Along the way, it has dropped to the 38.2% Fibonacci retracement level.
It has also moved below the 100-day and 50-day moving averages. It is also below the descending lower trendline that connects the highest points since March this year. The stock has also formed a slanting double-top pattern.
Therefore, in August, the shares will remain in a bearish trend so long as it is below the two MAs. The reference point will be at the July low at 157p. A drop below that level will open to the possibility of it falling to the 61.8% retracement level at 138p.