After peaking in May last year, the stock of Thomas Cook Group (LON: TCG) sold off and got back to levels last seen in 2012. The successor of the oldest travel company in the world (Thomas Cook & Son), has been struggling to find interest from investors for almost a year now, but recently, the stock started showing signs of consolidation. This means that there might be a chance that the stock could become attractive again on the market at the current price.
After sliding from around the 148.00 level that was reached in May, to the 20 mark, which was tested in December, TCG has now started coiling up within a triangle formation drawn from around the beginning of December. For now, we will wait for a break through either of the sides of the formation, before we start examining the forthcoming directional move.
If TCG breaks above the upper side of the triangle and travels above the 39.60 barrier, marked near the highs of January, this may attract more investor attention, which may lift the share price. This is when we will start examining higher potential resistance areas, like the 43.70 obstacle, or the 49.40 hurdle, marked by the high of November 26th. If the buying activity doesn’t ease off there, TCG may easily get lifted to the 55.20 barrier, which is the high of November 2nd. Also, this is where the stock could coincide with the 200 EMA.
Alternatively, a break of the lower side of the triangle and a drop below the 25.60 hurdle, which is the low of February 12th, could place the buying activity on hold, at least temporarily. Such a move might drag the price even further south, potentially leading to the December low, at 19.50. But still, even if there is no investor interest in the stock at that price, a break below the 19.50 hurdle might push TCG further down, where the next possible support zone could be seen around the 11.20 level, marked by the lowest point of 2012.
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