There’s a real risk this jet maker will take a dive

Could the share price be about to take a trip to challenge the lows of 2021?

Our intention of looking at an EU share every week was nearly forgotten, taking a low flying A400 military transport to provide a reminder. 

Our campaign to cover some European stocks is on the basis they’re mostly doing better than UK offerings. Except, that is, for Airbus (EURONEXT:AIR)…

The company share price has proven about as interesting as all aviation stocks since Covid-19 impacted. Similar to Boeing (NYSE:BA), Airbus feels like the share price is about to take a trip to challenge the lows of 2021. 

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The immediate suggestion is of weakness below €95 triggering reversal to an initial €85, not a very threatening reversal and certainly giving the visual impression we should anticipate a bounce, should €85 make an appearance. 

The real danger comes if anything allows the share price to actually close below €85 as our calculations become quite nasty. In such a scenario, we’re able to favour further descent in the direction of €61, a point where it almost must bounce. Even the visuals share such a suspicion.

However, we suspect the share shall struggle to get below €85, our calculations feeling just a little hysterical. As a result, there’s a fair chance this will prove worth keeping an eye on in case €85 makes a guest appearance. 

To review the other side of the coin, the share price requires to exceed €105 to hint at happy days ahead. Such a trigger presents an initial target level of €115 with secondary, if exceeded, calculating at €128. 

Neither ambition comes close to exceeding the pre-Covid high of €138 and, given a plethora of gloomy outlooks relating to air travel, common sense suggests aviation shares shall remain trapped between the pandemic highs and lows until such time confidence returns to the world.

Source: Trends and Targets. 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 or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.