The IAG and EasyJet share prices jumped on Monday as signs of aviation reopening emerged. IAG shares rose by more than 4% and closed at 205p while EasyJet rose by more than 4.20% and closed at 1,028. Other aviation-related shares like Rolls-Royce, Melrose Industries, and Lufthansa also surged.
What happened: Aviation shares like EasyJet and IAG, which owns British Airways, rallied after signs that trans-Atlantic flights will resume soon.
During the weekend, European Union’s Ursula von der Leyen said that it would start allowing flights between the two regions soon, but only for people who have been vaccinated. This travel is expected to happen by summer, a busy period for the region’s travel. Travel between the UK and the US could be a topic when Joe Biden meets with Boris Johnson in London soon.
In a statement after the news, IATA, which is the global airlines body said that the comments gave people hope. In a statement to Reuters, British Airways chief also welcomed the move. So, what next for IAG and EasyJet?
The daily chart shows that the EasyJet share price has been in a strong upward momentum lately. This has seeen it move above the ascending trendline that is shown in black. The shares have also moved above the 50% Fibonacci retracement level of 986p. It has also risen above the 25-day and 15-day exponential moving averages. Therefore, the stock could continue rising in the near term. But this forecast will be confirmed if the stock moves above the resistance at 1,068p. However, a move below the 50% retracement at 986p will invalidate this trend.
A closer look at the IAG share price shows a relationship with that of EasyJet. The two stocks have been in an upward consolidation pattern. It has also moved above the short and medium-term moving averages and is slightly below the 61.8% Fibonacci retracement level. The shares are close to the important resistance at 222p. Therefore, like EasyJet, I suspect that the stock will keep rising if it manages to move above this resistance.
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