kaaiii

Qantas heading south?

Short
ASX:QAN   QANTAS AIRWAYS LIMITED
Qantas is moving up towards a strong resistance area with prior support and resistance lining up with the 50% retrace of the move up from 2012-2020 and the 38.2% retrace of the move down from Jan - March. The 55 SMA is also not far above and moving south.

The RSI seems to be making an ascending wedge that is coming to an apex.

If the ascending wedge or trendline breaks to the downside I think it's likely to revisit the recent lows and possibly head to around $1.20 which is roughly the lows of 2012 & 2014 as well as 1.618 and 0.618 fib extensions of wave 1 & 3 respectively.

I assume a lot of traders might have been speculating on Qantas possibly being the only airline in Australia after Virgin stopped trading. The news of virgin being offered a $200 million bailout from the QLD government after hours on Friday might cause some to exit their positions going into resistance.
Comment: After breakout out of the wedge to the downside we had a small rally off prior resistance turned support. With the US and EU airlines all losing between 3% - 5% overnight it's not a surprise Qantas is opening the day to the downside.

I remain slightly bearish on Qantas until we break above the green resistance band.
The next week will hopefully show us if the low is in or if we can expect to retest the lows of 2012 & 2014

Comment: Qantas started the week with a little bounce. The question is will it be sustained?
Bit of bad news suggests Qantas could slide a bit more in the coming months if they're forced to pay up.

Qantas and Perth Airport are currently locked in a court battle over $11m in unpaid fees.

The airline has also refused to pay rent to other airports around the country for February and March, in an effort to preserve its cash balances during the coronavirus crisis.
Comment: More bad news for Qantas... Probably means it'll break support. Although it could act as a nice catalyst to break resistance if they somehow solve out all their legal/ payment issues.

Qantas chairman Richard Goyder has called on Perth Airport to immediately withdraw termination notices issued to the airline on Friday, saying they amounted to eviction notices and would result in operations at the airport stopping within a fortnight.

On Friday morning, Perth Airport signalled it was prepared to begin tearing up several leases of its biggest customer, as tensions between the two businesses reached a breaking point over claims Qantas owed $20 million in aviation and rental fees unpaid since February.

https://www.smh.com.au/business/companie...
Comment: Qantas dangerously close to breaking it's support.
QLD Government indicating it wants to buy VAH along with US stocks & airlines dropping overnight might have been too much bad news at this critical level.

Comment: Qantas just made a new local high but we're not out of the woods yet as we still have the 50% retrace and strong resistance above us as seen best on the monthly chart.


If we look on the hourly Qantas is currently on a 9 which marked the last 2 local tops, so I think a pullback is likely, the question is will people that entered above 4$ get scared and pull out causing more selling pressure or will $3.85 turn into support.


Overall starting to get less bearish on Qantas, but I'd need to see us break and close above 4.30 before completely giving up on the bearish scenario.

Comments

Thoughts on this now as it just broke the c.3.95 resistance.
+1 Reply
kaaiii NeilMaharaj
@NeilMaharaj, Thanks for your comment I updated the idea with my thoughts. I think it's off to a great start. We still have the strongest resistance above us though so it depends how the daily and weekly close since a new high means nothing if we end up coming back down from the resistance creating a large wick
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@kaaiii, Yep. would be good to keep an eye on this. But it could be a small adjustment before the industry settles in for a bit. Im confident it will go up in the long run. Just seeing when the good buy option is
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24k Is The Target on Bitcoin
+1 Reply
Very good combination of technical and fundamental perspectives. Can completely see why you believe it's heading down , I'll be looking for the break and retest eitherway. Happy trading!
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nice idea
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kaaiii CryptoCheck-
@CryptoCheck-, Cheers!
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