The IAG share price is holding steady as investors predict a swift recovery of business travel after it slumped by more than 70% during the pandemic. The stock ended the day at 207p, which was 11.6% above the lowest level in May.
IAG shares steady: International Consolidated Airlines (IAG) is the parent company of airlines like British Airways and Iberia Airlines. Like all airliners, the company’s shares slumped in 2020 amid the coronavirus pandemic as the air travel industry slumped. The shares have jumped by more than 43% this year as investors bet that the industry will bounce back.
In a story in today’s Wall Street Journal, Alison Sider said that business travel has started to rebound, which is a good thing. For one, companies like IAG make most of their money from business travelers who tend to pay more. The story quoted Alison taylor, the chief customer officer at American Airlines who said that 47 of its 50 largest corporate accounts have confirmed that they plan to resume traveling.
Further, some high-profile events like TED conference are set to return, meaning that the sector will see robust growth. Further, recent data showed that the number of people screened at US airports rose to 2 million during the Memorial Weekend. This is a sign that the industry is recovering faster than expected.
The four-hour chart shows that the IAG share price jumped sharply from November last year. However, in the past few weeks, the shares have remained in a tight range. They have struggled to move above the year-to-date high of 221p and below last month’s low of 185p. The stock is still slightly above the 25-day and 50-day exponential moving averages (EMA).
It is also slightly above the ascending trendline that is shown in red. Therefore, in my view, the stock will continue rising as investors target the YTD high of 221p. However, a drop below the lowest level in May will open the possibility of it dropping to 174p.
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