Where will Jet2 shares fly next?

Despite disastrous financial results, shares in this holiday company have rallied. This sharp-eyed analyst studies the charts. 

Jet2 & Bollore (LSE:JET2 & EU:BOL) 

This, essentially, is a tale of two transport companies. Both operate internationally, the French company flourishing, the British one rather less well. Obviously, the key ingredient is what they transport, Bollore (EURONEXT:BOL) moving "stuff" in trucks, Jet2 (LSE:JET2) stuffing people onto jets. At least, that's what Jet2 would love to do, aside from the small matter of a pandemic utterly trashing their business.

The original pandemic price drop, when the company was known as Dart Group, saw the share plunge from £19 down to below £2. Changing their name last year to Jet2 certainly appears to have improved their fortunes, despite passenger numbers being dreadful.

Presently trading at around 1,225p, it has been a real surprise witnessing the share climb from the pandemic low of 184p, despite air travel remaining a fraught ambition thanks to the UK government appearing to apply arbitrary rules against destinations. 

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Even if inclined to fly somewhere, as Portugal recently proved, there's a real risk of a holiday being interrupted, thanks to a change in status for a destination. The threat of being forced to quarantine for 10 days on return, forced holidaymakers to grab flights to the UK in panic before the new rules were applied.

It certainly begs the question, if a country has become dodgy, facing a change to its status, why bother giving five days’ notice? The Covid-19 germ must be one of the most intelligent virus' ever, knowing it's not to travel to the UK during the warning period before travel stops.

We find it interesting the bounce from Jet2’s pandemic bottom has been so energetic. We'd calculated the potential of movement to 1,411p, the price achieving this target pretty effortlessly and, better still, exceeding the level through six price movement cycles, the most recent upward pulse hitting 1,571p. 

Source: Trends and Targets. Past performance is not a guide to future performance

While encouraging, movement in the last few weeks is proving a concern, the immediate situation suggesting weakness continuing below 1,215p risks an attempt at 1,093p. 

Descending to such a level risks provoking a bigger picture problem as below 1,093p threatens a further change down to a bottom, hopefully, at 949p. 

Visually, some slight hope is available, should the share somehow find impetus to lift itself above Red on the chart, currently around 1,400p. Such a miracle calculates with a cycle commencing toward 1,848p, pretty close to (but not exceeding) their pre-pandemic high. Only when shares start trading above this level shall we become truly enthusiastic, rather than cautious.

Bollore (EU:BOL) 

Regarded as one of the world’s 500 largest companies, Bollore is a French transport company, founded in 1822. We'll admit, we'd never heard of them until we studied price movements in Europe in the hope of finding a decent "pick", where the upward potentials reflect what's happening with the French stock market. As it has exceeded its levels pre-Covid, we're automatically hopeful for its future.

Before the Covid-19 drop last year, Bollore achieved €3.9, and now is trading higher at €4.42. The share price has exhibited a reliable climb from being laid low by the virus and, importantly, the market opted to gap it upward (circled) in February, clearly intending a visit to happier climes. 

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The current scenario suggests above €4.6 should head to an initial €4.95, along with some probable hesitation. But we expect €4.95 shall be exceeded, giving a longer term potential of €5.64, along with a need to revisit our numbers for the future. 

If everything intends go wrong, the share will require trading below €4.03 to inspire panic, along with a real threat of traffic down to €3.4 and, hopefully, a bounce. 

Source: Trends and Targets. Past performance is not a guide to future performance