How to trade this turbulent share

This budget airline has taken a nose dive lately, so chartist Alistair Strang has run the numbers to look for signs of a turnaround.

Ryanair (LSE:RYA) 

Since disclosing their airline pilots are paid roughly the same as some plumbers (in London), Ryanair Holdings share price appears to be taking a bit of a tumble. Of course, perhaps there are other reasons!

Pretty crucial though is the recent forced drop below red, as displayed with a circled manipulation gap on the chart. It becomes clear the market wants Ryanair's price down and the immediate situation is of weakness below 13.9p indicating a descent to an initial 13.45p, along with the sort of bounce associated with a heavy landing at Bristol. 

Our secondary, if (when) such a point breaks is at 12.2p where some sort of bounce can be hoped for. Worse, if it all goes wrong and they issue further negative news, one heck of an argument demands an express visit to 10.7p.

To escape this mess, the share price ideally needs to exceed blue - 16.5p at present but to be fair we'd be pretty impressed with any miracle recovery above red, the prior trend.

Of course, there is always a chance the market has overreacted to whatever influenced the recent drop. Unfortunately, the required proof shall be if movement anytime soon above 14.61p achieves an initial 14.94p. Absolute key shall be what happens following any movement above 14.94p as a visit to 15.89p becomes viable, almost a return to safety and a future chance for recovery above blue.

In summary, we suspect it shall wind its way down to 12.22p eventually.

Source: interactive investor      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.