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by Darius Anucauskas

Lufthansa Stock Could Be Spreading Its Wings for Take-Off

On January 4th, 2018, the Deutsche Lufthansa AG stock (ETR: LHA) reached its all-time high at 31.250. Since then, it was all downhill for the top German airline, as its share price started drifting south during most of 2018, but in October of that year, the stock started recovering. In February 2019 the price took another dive and since the it continued to move lower with occasional corrections to the upside. The price is trading below its medium-term downside resistance line drawn from the high of February 26th. LHA recently bottomed near the 16.860 level, from which it rebounded and pushed higher. Given that the stock had distanced itself quite a bit from the above-mentioned downside resistance line, from the short-term perspective, we may see a correction back up again, which may allow the share price to recover some of its losses made during the month of May.

A strong push above the 18.285 barrier, marked by the high of May 17th, could invite more short-term speculators into the game, who might help raise the stock to its next potential resistance area, at 19.165. That area held the stock from falling on March 26th and April 1st, so this time it might take the role of a temporary resistance. That said, if the 19.165 obstacle is not able to withstand the buyer pressure, a break of it may lead the stock to the 20.230 level, marked by the low of May 7th. Also, such a move would place LHA back in the positive territory for the year.

Our oscillators, the RSI and the MACD, have bottomed and shifted a bit higher. Although the RSI is currently somewhat flat, still, some might see this move as a good sign. The MACD, even though still below zero, had moved above its trigger line and now points to the upside. This is why we believe there could be a possibility to see a bit more recovery, at least in the short run.

Alternatively, a drop below May’s lowest point, at the aforementioned 16.860 level, could spook investors, as such a move might open the door for another slide, potentially targeting the 16.095 hurdle, which is the low of May 18th, 2017. If there are still no new buyers of the stock at that price, a further drop could send LHA to test the 14.795 zone, which held the stock from moving lower on March 28th and April 10th in 2017.

Lufthansa daily

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