- Summary:
- IAG share price is on track to the eighth successive weekly gain, underlining strong investor sentiment-but profit-taking posses a risk.
International Consolidated Airline Group (LON: IAG) share price maintained its winning streak on Wednesday, gaining 0.6 percent in the late morning trading session to trade at GBX 193.50. British Airways owner IAG has maintained a strong upside since August, helping drive up the share price gains to 25 percent year-to-date. Furthermore, it is on course to register the seventh successive daily gain and eighth successive weekly rise.
IAG strengths and risk of profit-taking
The airline conglomerate owns several operators such as British Airways, Vueling, Iberia, Aer Lingus, IAG Loyalty, among others, and has a stable outlook for the year. According to International Air Travel Association (IATA), passenger numbers are projected to hit a record 4.96 billion in 2024. Cargo is also projected to rise to 62 million tonnes. This gives IAG good headroom to leverage its economies of scale and increase margins.
A sudden decision against taking over Air Europa in August came as a surprice, but has certainly not dented gains by IAG share price. Also, developments in the last ten weeks signify an upbeat outlook. The management announced a dividend and reported earnings of $1.34 billion vs analysts’ forecast $1.08 billion in the second quarter.
Meanwhile, IAG’s Earnings Per Share (EPS) was at 4.47x, making it a cheap buy. These set up a strong basis for further gains by IAG share price. However, with YTD gains of 25 percent and monthly gains of 16 percent, IAG share price faces the prospect of downward pressure from profit-taking, especially if recession talks resume after Fed interest rate cuts.
IAG share price forecast
IAG share price is on an upward momentum, with the MACD indicator above the signal line. Also, the price is approaching the upper Bollinger Band, underlining the bullish control. The upside will likely prevail if the price action stays above 193.75. That could see the establishment of the first resistance at 195.00.
That said, the bulls could break above that level if they strengthen their momentum, which could possibly send the price higher to test 195.95. On the other hand, a move below 193.75 will favour the sellers to take control. In that case, initial support could come at 192.90, below which the upside narrative will be invalid. Furthermore, the resulting momentum could extend the decline to test 192.10.
