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by Darius Anucauskas

Lufthansa AG is Preparing for Lift Off

Most of the big airline-company stocks did not do well in 2018, closing slightly, or deeply in the red. Lufthansa AG shares (ETR: LHA) were one of those that also felt the bitter side of investors and traders, where they had distanced themselves away from jumping into any airline stock. So far, LHA is having a much better start of the year than in 2018, as for almost the whole month of January the stock keeps climbing higher.

From the technical side, LHA broke its long-term downside resistance line, taken from the high of the 4th of January last year and pushed higher, reaching the 200 EMA. The stock is also trading above its short-term upside support line taken from the low of the 30th of October, which adds another positive spin on the near-term outlook. In our view, the Lufthansa AG share price could continue flying higher, especially if one of the key resistance areas gets broken.

As mentioned above, the important resistance area that we will keep a close eye on is the 2018 December high, at 21.84, a break of which may lead the stock further up. The next strong potential price target for LHA could be the 23.53 barrier, marked by the highest point of September last year. There is a chance that the price could stall there temporarily, or even correct slightly lower. If the correction is short-lived and the price struggles to push further down, more investors could see this as an opportunity to step in again and make the Lufthansa AG stock fly again. A break above the 23.53 barrier, might clear the runway towards the 24.44 level, which is the high of the 1st of August 2018.

Our oscillators, the RSI and the MACD, are both in support of the above-discussed idea. The RSI is above 50 and points to the upside. The MACD is also pointing higher and at the same time is above both, its zero and trigger lines.

Alternatively, in order to start considering a downside scenario, we would need to see the stock breaking below both – the aforementioned upside and downside lines. This way we may start examining lower levels like the 18.70 barrier, a break of which could send LHA shares back down to the 18.13 level, marked by the inside swing high of the 30th of October.

Lufthansa daily


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