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IAG Share Price Turns Green As Airline Shares Bounce

The bullish divergence on RSI which I mentioned in my previous IAG share price analysis is playing out as the stock opened the week in the green. However, the 144p level which was a previous support level has now turned into a turned resistance level.

The shares of the British Airways owner are struggling to reclaim this level. At the time of writing, the shares are priced at 144.3p after gaining 1.15% on their first trading day of the week.

The recent bounce in IAG’s shares can be explained by the overall positive sentiment in the airline industry. Alongside IAG, Ryanair is up 2.12%, while easyJet also gained 8p on Monday. Additionally, the investors will be keeping an eye on the Bank of England’s rate decision which is scheduled for this Thursday.

IAG seems to have benefited from the increased demand for air travel as the airline operated at a whopping 96% capacity in its third quarter. The British Airways owner reported an operating profit of €1.745 billion which was up 11% from the expected sum. Barclay’s analysts also expect IAG to report €3.4 billion in yearly revenue, up from the €3.2 billion expected before its Q3 earnings report.

The CEO for IAG also mentioned that the bookings for the first and second quarters of 2024 are currently under expectations. He further added that it is still too early to predict whether the airline industry would suffer high fuel costs and booking demand loss due to the conflict in the Middle East.

IAG Share Price Forecast

LON: IAG is facing a huge resistance from 144p after breaking below the level a few days ago. Consequently, the chart below also shows the price trading 7.3% below its 200 MA level which paints a bearish picture for the price.

In the case of a confirmed breakdown below 144p, the IAG share price forecast will flip bearish. If thi scenario occurs, I expect the price to see an 11.5% correction toward the 128p support level. However, the bulls can still expect a rally towards the 200 MA provided the price reclaims 144p as a support level.

IAG share price technical analysis
IAG 1D Chart