Sisa87
Short

Lufthansa could leave the DAX on 4 June

XETR:LHA   LUFTHANSA AG VNA O.N
The corona virus has hit the aviation industry hard because the outbreak of the pandemic was unforeseeable. Lufthansa is at the bottom of the DAX when it comes to the share price development since the beginning of the year. The founding member of Germany's leading index has already lost more than 50 % of its value and could leave the first stock exchange league on the review date of the DAX on June 4, leading to a spectacular change in the DAX . When it comes to state aid, the German bureaucracy is again reaching its limits and delaying the measure, thus also damaging the LH.

One can ask oneself why it takes longer for Lufthansa with the state aid than for its neighbours? AirFranceKLM and other European airlines have already received their liquidity aid. Even Ryanair has already been able to obtain 600 million British pounds via the Covid Corporate Financing Facility.

Chart-wise the bearish trend will continue today. LH is currently trading at a discount of 2.5 % at around 7.82 and is thus cheaper than the low-cost carrier Ryanair. The daily chart shows that the LH share is in a descending triangle . The area around 7 seems to support the crane . A disclosure of this short-term important zone could continue the trend quickly and the next targets at 6.73 / 6.25 . On a higher level, a long term price target at around 3 can be determined based on the level of the descending triangle . However, LH will only be able to reach its cruising altitude if it can sustainably break through the 10.50 mark - but given the current uncertainty, this may take some time.



Comments

The german goverment is going to buy 20% of the Lufthansa stock. Will it pump?
Reply
Trader4Life77 Robinsmagicshow
@Robinsmagicshow, it will only for the short term. is a clasic buy the rumour and sell the news. Imagine that the german goverment will have shares at 2,56 euro and is expected to sell them when still the price will be up to this level.
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