ASX-listed Airlines and Aviation Service Stocks Well Rooted For Uptrend Continuation?- QAN, SYD, WEB and AQZ

  • Apr 08, 2020 AEST
  • Team Kalkine
ASX-listed Airlines and Aviation Service Stocks Well Rooted For Uptrend Continuation?- QAN, SYD, WEB and AQZ

The COVID-19 outbreak has taken a toll on many industries, sectors, and major indices, leading to a steep sell-off in the equity market across the globe. However, as the growth rate of the virus eases across many affected nations, the global equity market is showing slight optimism.

The travel industry is among the worst-hit by the coronavirus pandemic, despite the weaker oil prices, which is one of the major raw material costs in the industry. The airline sector is at the receiving end, taking a considerable hit from the coronavirus outbreak amid many Federal and State governments ban on travel across the globe; however, as the stringent deadlines of travel ban across the continent are nearing, airlines and related stocks are responding interestingly.

ASX-listed Airlinesand Aviation Service Stocks

 

QAN Daily Chart (Source: Thomson Reuters)

QAN Daily Chart (Source: Thomson Reuters)

 

On the daily chart, the stock is trading below the 1/3 fraction of the projected Fibonacci fan and has retraced over 78.6 per cent before the recent bounceback. QAN is currently below the 200-day exponential moving average, suggesting that the current trend is a downtrend or the correction phase of the primary uptrend which started from the level of ~ $0.905 to halt at ~ $7.445.

The stock is currently testing the previous break below the 1/3 fraction of the Fibonacci fan (projected by connecting the lowest rally point to the highest). A break and close above the same with decent volume could prompt the stock to further test the 2/3 and 3/3 fraction of the Fibonacci fan, successively, while the support on the chart is at the recent low of $2.03 (intraday low on 19 March 2020).

 

QAN Daily Chart (Source: Thomson Reuters)

QAN Daily Chart (Source: Thomson Reuters)

 

On further magnifying into the recent price action, it could be seen prices are on a rise with tapered volumes with a positive signal from the moving average convergence and divergence or MACD indicator. The stock is currently above the 2/3 fraction (resistance) of the projected Fibonacci fan. The price actions are also forming a short-term potential descending triangle with support around ~ $2.8 – 3.0.

The 50-day and 21-day exponential moving averages have shown a negative crossover, and the spread between both the short-term EMAs is still large. Ahead, if the stock break and sustain above the 3/3 fraction of the projected level it would mark an early sign of primary trend continuation, and failure to do so would suggest a continuation of the corrective phase.

 

SYD Daily Chart (Source: Thomson Reuters)

SYD Daily Chart (Source: Thomson Reuters)

 

On the daily chart, the stock retraced 61.8 per cent and is recovered to test the 2/3 fraction of the Fibonacci fan resistance but failed to break above the same and fell again. SYD is currently trading below the 200-day EMA and is showing phase 2 or correction phase of the primary rally, which started from $2.445 till $9.343.

 

SYD Daily Chart (Source: Thomson Reuters)

SYD Daily Chart (Source: Thomson Reuters)

 

On further zooming into the recent price action, it could be seen that the MACD indicator is giving a positive signal; however, the stock is unable to penetrate the 1/3 fraction of the Fibonacci resistance. The price action witnessed a Doji candle on 6 April 202, and the price has crossed the high of the doji during the trading session on 7 April 2020, which makes it poised to once again test the 1/3 fraction of the Fibonacci resistance. SYD is currently below the 50-day and 21-day EMAs, which would also offer it some resistance. The Fibonacci projections from the wave point 0,1,2 are showing multiple resistance levels, and the stock is currently testing the 23.6 per cent of the projected resistance. The primary resistance for the stock is at $5.76 to $5.91, while the support is at $4.98.

 

WEB Daily Chart (Source: Thomson Reuters)

WEB Daily Chart (Source: Thomson Reuters)

 

The stock has retraced more than 78.6 per cent of the primary uptrend and is currently showing a negative signal from MACD and 14-day relative strength index. WEB is currently also trading below the 200-day EMA and has a lot to cover to indicate any change in trend, with a high probability of a continuation in the ongoing correction.

 

WEB Daily Chart (Source: Thomson Reuters)

 

On further zooming into the recent price action, it could be seen that the stock is trading well below the 1/3 fraction of the Fibonacci resistance fan and has shown no attempt to penetrate the primary resistance level, which is at $3.5 - $4.0.

  • Alliance Aviation Services Limited (ASX:AQZ)

 

WEB Daily Chart (Source: Thomson Reuters)

 

The stock retraced ~ 78.6 per cent of the primary uptrend, which started from ~ $0.41 and ended at $3.03. In the status quo, AQZ is showing a positive crossover from MACD and has successfully crossed the 1/3 fraction of the Fibonacci resistance fan to test the 2/3 fraction.

 

WEB Daily Chart (Source: Thomson Reuters)

WEB Daily Chart (Source: Thomson Reuters)

 

On further zooming into the recent price action, it could be seen that the stock is currently testing the third 3/3 fraction of the short-term Fibonacci resistance fan projected from its recent high. AQZ broke above the previous two fractions (1/3 and 2/3) with decent volume and is showing large volumes as compared to historical trend, suggesting that an accumulation of the stock is going on.

The stock is trading above the 21-day EMA and is rooted strongly to test the 50-day EMA, above which, a break and close with decent volume would mark an early signal of the continuation of the primary uptrend.


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