Stars allign for an IAG SHORT!
Fundamentally, Airlines are having a tough ride & it doesn't look like its going to stop anytime soon. The fragmented industry has failed to provide any consistent returns for the last 10 years (EBIT margins have averaged just over 1.2%!!), Full service airlines specifically have been struggling - not only due to the exogenous demand factors then rely on (Eurozone GDP), but also as they have been forced to cut previously revenue generating activities such as offering on board amenities in order to compete on price with low cost carriers.
IAG are currently making a loss on their operations with costs spiralling out of control. Labour disputes have further added to their headache as heavy unionisation prevents them cutting staff! Been looking for a short entry for just over a month, and with the OPEC decision yesterday (Oil accounts for 34% of operating costs!!), aswell as a rejection of the 450 level completing a long term head and shoulders pattern - looking to get short as soon as 420 price is broken to the downside.
Entry - 415
SL - 460
First Target - 360
Second Target - 320
IAG are currently making a loss on their operations with costs spiralling out of control. Labour disputes have further added to their headache as heavy unionisation prevents them cutting staff! Been looking for a short entry for just over a month, and with the OPEC decision yesterday (Oil accounts for 34% of operating costs!!), aswell as a rejection of the 450 level completing a long term head and shoulders pattern - looking to get short as soon as 420 price is broken to the downside.
Entry - 415
SL - 460
First Target - 360
Second Target - 320