Qantas Airways has been under Algo Engine sell conditions since forming a lower high in February at $6.25. The stock is now trading at $5.25 and we see little reason to change our short-side bias on this one.
The post below is from the 6th of December. Qantas has since sold off and is now trading $5.35
Qantas is under an Algo Engine sell signal, following the lower high formation at $6.16
Chart from 6th of Dec
Our ALGO engine triggered a sell signal on QAN on November 14th at $6.05.
Since then the stock has traded lower and reached $5.45 in early trade today.
From a longer-term perspective, we believe QAN will benefit from from the 30% drop in crude oil since October. Even if energy prices stabilize near current levels, QAN is well-placed for solid profit growth in 2019.
We expect to see investor interest accumulate in the $5.10 area and will look for an ALGO buy signal in that range.
Our ALGO engine triggered a sell signal for QANTAS into yesterday’s ASX close at $5.90.
This “lower high”pattern is reference to the intraday high of $6.30 from September 12th.
On October 25th, we posted a report to buy QAN in the $5.40 area on the basis of lower oil costs and steady earnings growth.
At this point, it looks like oil prices are overdue for a rebound higher, which could pressure QAN back into our $5.40 to $5.35 buy zone.
As such, we suggest taking profits in QAN. At current levels the return will be just over 8%.
We will look for another ALGO buy signal in the $5.30 area.
QAN released their Q1 trading update today.
With total revenue up 6.3% and forward bookings up 8% on the same period last year, we expected the share price to have risen in early trade.
However, with widespread downside pressure across the ASX today, QAN has slipped to $5.40.
This is in the middle of our recent $5.45 to $5.35 buy zone. As such, we suggest investors add to long positions with a medium-term price target in the $7.20 range.
Despite widespread downside pressure and increased volatility in the ASX 200 index, shares of QAN have stabilized above the $5.10 support level.
QAN will be releasing its September quarter trading update next Thursday and holding their AGM next Friday.
We believe that both of these events will be supportive of higher share prices.
QAN has been in our ASX Top 100 model portfolio for over a year and we suggest investors look to add to long positions in the $5.35 to $5.45 range.
Our medium-term target is $6.70 with a longer-term view to $7.35.
Since posting an intra-day high of $6.92 on August 31st, shares of QAN have slid over 20% lower and reached a 7-month low of $5.38 in early trade today.
Much of this correction has been driven by higher oil prices, which we believe are transitory and largely covered by QAN’s in-house dynamic hedging operations.
Technically, the share price reflects a deeply oversold reading on the relative strength indicator (RSI) and looks to be exceptional value at current levels.
QAN is part of our ASX Top-50 portfolio and we see initial resistance near $6.65, with an longer-term target of $7.25.
Qantas will provide its 1Q19 trading update on 25 October 2018.
QAN was added to our ASX Top 50 model portfolio in July of 2017 at $5.25.
Due to the recent spike in oil prices, the share price has been drifting lower and nearing our original entry level.
Along those lines, we expect the trading update to include how the company’s dynamic hedging program is insulating their bottom line from higher fuel prices.
We see good value at current levels for a move back into the $7.90 area over the medium-term.
Our ALGO engine triggered a buy signal for QAN at $6.16 on June 29th.
Since then the share price traded as high as $6.92 in late August.
However, the recent surge in oil prices has pushed the share price down to $5.82 in early trade today.
Considering the dynamic hedging program that the company has in place, we believe the share price is nearing an oversold condition on the daily charts.
QAN is part of our ASX Top 50 portfolio and we see good value at current levels for a move back into the $7.90 area over the medium-term.
Our ALGO engine triggered a buy signal on QAN into yesterday’s ASX close at $6.16.
This “higher low” pattern is referenced to the intraday low of $5.95 posted on February 5th.
A recent broker note from CITI has retained their buy rating on the stock with a $7.90 price target.
Part of CITI’s analysis focused on the airline’s dynamic hedging program, which has reduced the drag on their overall profitability during the recent rise in fuel prices.
QAN was added to our ASX Top 50 Model portfolio in July of 2017 at $5.25.