The International Consolidated Airlines Grp SA (LON: IAG) share price has risen 8.22% over the past month from its 20 March 2023 lows, leaving many wondering what comes next for the company that owns and operates the British Airways airline and several other leading European airlines.
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However, the airline’s recovery from its March lows faces significant resistance at current prices, as highlighted by the rectangle on the chart below. Will IAG shares break above the resistance zone and rally higher?
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First, to answer the above question, we must look at the fundamental factors that could fuel a rally higher in IAG prices. The most important figure for an airline is the number of passengers carried per flight. Given the upcoming summer travel boom, we can expect IAG to operate its flights at almost full capacity.
Therefore, a surge in passenger numbers during the peak summer travel season will likely boost IAG’s share price. On the other hand, the technical picture painted by the chart below indicates that IAG shares may be in for a rough time over the short term since they could pull back.
Usually, when the price cannot break above a crucial resistance zone multiple times, we will likely see a pullback as sellers outnumber buyers. Still, the pullback is yet to occur, and it seems that the IAG share price is forming a rising wedge pattern and may break above the resistance zone.
Looking back at IAG’s fundamentals, we can see that the airline group runs several airlines, including Spain’s national carrier Iberia and the UK national carrier, British Airways. Given its diverse portfolio of airlines, the company could be negatively affected by strikes in any of the countries it operates in.
For example, the Easter strikes in the UK affected IAG’s operations negatively, forcing the airline group to cancel up to 300 flights. Investors can only hope there will be no strikes during the summer travel period so that the airline group can maximise its revenues and profits.
*This is not investment advice.
The IAG share price.
The IAG (LON: IAG) share price has risen 8.22% in the past month as buyers pushed prices higher, but the stock faces stiff resistance.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.