IAG (LON: IAG) share price appears to be gearing up for a major move. The shares of the British Airlines owner are consolidating below a trendline and close to a major resistance level. The latest analysis suggests a retest of 170p could be on the cards.
On Monday, IAG shares opened higher. Till press time, the shares were up 0.91% and were changing hands at 161p. The benchmark FTSE 100 index kept on trading sideways after a brief surge in the opening hours. EasyJet shares were also up 1.16% on the first trading session of the week.
High Debt Makes LON: IAG A Risky Bet
In one of the latest International Consolidated Airlines (IAG) news, top rating agency Moody’s has improved its outlook on IAG share price and has changed it from ‘stable’ to ‘positive’. However, IAG’s corporate family rating remained Ba2. Moody’s cited the company’s improved margins, passenger volumes, and earnings as the reason for the improved outlook.
However, the company’s high debt still makes it a risky long-term investment. Till December 2022, the company had €20.0 billion in debt. Its cash reserves of €9.57 billion leaves it with a net debt of €10.43 billion. The overall liabilities of the company are €26 billion more than its cash reserves and short-term receivables.
IAG Share Price Heads For The Key Retest
The following LON: IAG chart shows that the bulls are gaining momentum after a pullback. Currently, the shares are 26.6%, up from the March lows. The stock appears to be heading for a retest of the 169p resistance which is a major level on its chart. The ongoing consolidation appears to be a healthy accumulation before the retest of 169p.
Global air travel is coming back to its pre-lockdown levels. A clear break above 169p can make the IAG share price forecast bullish. However, a rejection from the 164p-169p region is still the most likely scenario. This may form a head & shoulders pattern on the daily chart in case of a deeper pullback.
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