Is Lufthansa Ready To Fly?

by Darius Anucauskas
14:48, 2018/11/30

Lufthansa (ETR: LHA) is not having its best time this year, as the stock has been on a downslide since the 4^th of January. That said, from the short-term perspective, the stock continues to make higher lows from its reversal north on the 30^th of October. At the same time, this forced the share price to move fractionally above the long-term downside resistance line drawn from the peak of the 4^th of January. All this could spark hope among investors, who could try to squeeze some gains out of a possible uprise.

Lufthansa is currently balancing below the key resistance near the 21.73 level, marked by Monday’s high, but if the stock soars above it, then this could clear the path towards higher price tags. The next potential area of resistance could be seen near the 22.92 obstacle, a break of which might push the share price further up, where it could test the 23.53 resistance zone, marked by the high of the 21^st of September.

Looking at our oscillators, the RSI and MACD, both are somewhat in support of the above-discussed scenario. The RSI is currently above 50, near 60, which is a bullish indication. The MACD is above zero and its trigger lines. Also, the MACD keeps pointing to the upside, which also adds confidence for the bulls.

Alternatively, if LHA moves back down below the long-term downside resistance line and breaks below the short-term upside line as well, this may be seen as a bearish indication. At the same time, the stock would be placed below the key support area of 20.73, which is this week’s low. A further depreciation in the price may lead towards a test of the 19.86 obstacle, a break of which could push the share price further down to the 19.15 level, marked by the low of the 8^th of November.

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