IAG Share Price Set to Push Beyond 170p On COVID-19 Vaccine Cargo Deliveries

Summary:

The IAG share price action looks poised to breach the 170p mark as the company's cargo business gets a boost. The technical picture looks good as well.

IAG share price got a boost for the second day, sending it to the top of the gainers’ chart on the FTSE 100 index. The source of investor delight on the stock comes from the announcement that the aviation company’s cargo division has recorded a milestone in the contracted delivery of COVID-19 vaccines.

IAG Cargo says it has transported more than 10 million COVID-19 vaccines, including a 4-million-vaccine shipment to Nigeria, on behalf of UNICEF under the COVAX initiative. IAG Cargo made a similar shipment to Jamaica in partnership with British Airways, with 300,000 vaccines delivered.

As the pandemic continues to depress the global civil aviation industry, cargo shipments are becoming an increasingly important

source of revenue for aviation companies. IAG Cargo’s experience with airlifting pharmaceuticals spanning many years has positioned the airline group in a good spot to benefit financially from vaccine shipments. Investors appear to be applauding this; hence the new demand that has sent IAG share price is up 2.87% on the day.

IAG Share Price Outlook

Tuesday’s price move confirms the break of the falling wedge on the daily chart after a double bottom bounce on the 156.40 support. Price needs to break beyond 167.08, targeting 177.46 to complete the wedge’s measured move. At this resistance, the neckline for the potential double bottom forms. The double bottom is confirmed if this neckline is broken to the upside, setting up a potential measured move towards 194.94. This move needs to overcome the barrier at 194.94 to be confirmed.

On the flip side, rejection at any resistance barriers, accompanied by a pullback, targets the support level below it as the primary contact point of relevance. In other words, if there is price rejection at 167.08 followed by a pullback, 156.40 becomes the next target. Sellers would ultimately seek a violation of 156.40 to open the door towards 149.72 (6 January/10 February lows), followed by a drop towards 143.94 (5 January/12 February lows).