IAG Share Price Falls Further As Strike Looms

Summary:

The IAG share price is trading lower as the threat of a strike action reasserts its impact on investors' sentiment.

The IAG share price remains pressured this Monday by the threat of strike action after union workers of the company working at Heathrow Airport voted to embark on industrial action. The stock is down 0.79% currently, as investors prefer to tread the path of caution in a chaotic pre-summer holiday flying season.

Passengers have been hit with flight cancellations as airlines complain of staff shortages. However, things may get a bit edgy for travellers intending to resume holidaying after COVID-enforced breaks as the UK Department of Transport has given airlines a window to cancel flights without penalty ahead of schedule.

The measure allows operators to finalize their holiday flight schedules by Friday to create more manageable schedules. While IAG’s British Airways and the London Heathrow Airport have welcomed the move, it remains to be seen how it all plays out and how passengers react to the change.

News that the IAG Group has added new A320neo aircraft to its fleet moved the IAG share price slightly to the upside on Friday, but these gains are in danger of being lost by Monday’s resumption of selling activity on the stock.

The intraday rejection at the 110.26 resistance (7 March low and 30 June high) creates an opportunity for the bears to aim for the immediate downside target at 102.68 (3 August 2020 low). Attainment of this low depends on forming an outside day candle to support the dark cloud cover candlestick formed by 1 June and 4 June candles.

If the bears take out this support level, 96.74 becomes the new target to the south. This 27 October 2020 low must give way for the bears to attain another potential harvest point formed by the 25 September 2020/2 November 2020 double bottom at 88.92. Attainment of the latter completes the measured move from the bearish flag.

The 120.00 price mark may form an intervening pitstop, being a psychological resistance formed by the 12 May 2022 low. Conversely, a break of the 110.26 resistance opens the door toward the 124.48 northern barrier (21 December 2020 and 20 December 2021 lows). A further advance targets 130.00 (6 June high) before 136.64 (30 May high) and 143.94 (22 March high) emerge as additional targets to the north. The 200-day moving average will also serve as a dynamic resistance target at this price point.