Corporate Travel Management To Continue Trading In A Range?

Corporate Travel Management Limited (ASX: CTD) is an ASX listed consumer discretionary company based in Brisbane, Australia. The company provides innovative solutions for travel management for the corporate market. It is also having ATAS accreditation and operates globally, including regions like UK, Asia, North America etc.

The company’s technologies include travel portal, online booking service, ride sharing, travel reporting, traveller tracker amongst many.

Change in the senior management

On 23rd May 2019, the company announced the changes made to its senior management in line with the growth strategy embarked by the company. The current global chief financial officer (CFO), Mr Steve Fleming will be focusing on the company’s European operations and will be involved in the transitioning of the acquisition of UK company into CTM group. He is now assigned the role of CFO Europe and would be based out of London.

The company is on track to recruit a new global CFO, who will be based in Australia. This restructuring to senior management reflects the company’s growing operations worldwide with the majority of its profits generated outside of Australia.

Technical Outlook

On a daily chart, the stock is more or less moving sideways from March 2019 till today (23^rd May 2019). During this trading period the stock had made a low of A$22.91 (support) and high of A$27.4 (resistance). Oscillators are the best tools to be used to analyse a range bound trading pattern.

Oscillators are technical indicators that help to catch the overbought (top) and oversold (bottom) areas of a trading range. When the stock or market is trading in a range, it generally reverses from the same levels (support and resistance) many times which is picked up by an oscillator.

One thing is to be noted that oscillators do not work in a trending market wherein the stock is in a trend (either uptrend or downtrend) because trends generally continue to move in one direction.

The Stochastics indicator is also an oscillator that defines the overbought and oversold conditions. Any value above 80 represents the overbought zone, and value below 20 denotes oversold zone. When the market is overbought, it is assumed that it has risen too much and might soon come down and vice versa from the oversold zone.

On the daily chart, the stochastics indicator had given many overbought and oversold signals in the trading range mentioned above and as seen in the chart the tops and bottoms were quite accurate. Currently, the Stochastics is showing a reading at 13.93, which shows an oversold zone which is depicting that the stock is trading around the lower level of the range and hence suggesting a reversal from the bottom of the range that has been established.

Daily Chart of Corporate Travel Management (Source: Thomson Reuters)

If the trend goes weaker, the Stochastics will keep on sliding down till the maximum value of zero. Today, as of 23^rd May 2019, the stock is trading lower and if the Stochastics indicator gives a buy signal (reading going above 20) than it may start its upside swing towards the upper range (resistance) of the range.

The company has a market capitalisation of A$2.69 billion. The 52-week high is A$33.87 and the 52-week low is A$19.2. The stock fell by 2.98% and closed at its intraday low of A$24.04 as on 23^rd May 2019. The last one-year return of the stock is negative 3.6%.

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