The IAG share price is up sharply even after the Competition and Markets Authority (CMA) launched a case against British Airways. The shares rose by more than 1.45% on Wednesday, becoming the second top performer in the FTSE 100 index after Smith & Nephew.
What happened: IAG is the group that runs British Airways, Iberia, and Aer Lingus. British Airways is its biggest company. In a statement today, the CMA said that it would open cases after BA customers said that they were denied refunds during the lockdown. The CMA opened the investigation in December. Budget carrier, Ryanair is also being sued. The CMA said:
“Customers booked these flights in good faith and were legally unable to take them due to circumstances entirely outside of their control. We believe these people should have been offered their money back.”
In a response, BA said that it had issued more than 3 million refunds. It also blamed the government for punishing the company at a time when it is on its knees.
The IAG stock price likely rose because investors believe that the potential penalty will not be big enough. Also, at times, company shares tend to rise when bad news happens. For example, on Tuesday, in the United States, the Fastly stock price rose by more than 10% even after its services led to the outage of key websites like the New York Times and The Guardian.
The four-hour chart shows that the IAG share price rose sharply today. However, the stock is still in the same range it has been in the past few sessions. At the same time, the shares have formed a triangle pattern that is shown in blue. This symmetrical triangle pattern is nearing its confluence zone, meaning that the shares will soon have a breakout.
In most cases, when there is a symmetrical triangle, a breakout can happen in either direction. However, since this triangle is happening after the price rose sharply, there is a possibility that the stock will have a bullish breakout. On the flip side, a drop below the support at $185 will invalidate this thesis.
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