The sharp rise up from the triple-bottom formation (seen on the weekly chart below) was a short lived uptrend after which the BA share price moved into a congestion range from 243p in Sept ‘09 to date.
In fact the price reacted by falling half way of the uptrend at the 180p level (easily visible on the daily chart below). From there it has moved sideways within a decreasing pennant triagle between support (at 180p) and resistance (the tops downtrend line).
The price should soon breakout of the pennant formation, one way or the other and it will be the direction of that breakout that will indicate the likely future direction of the share price over the succeeding weeks.
So, is British Airways a ‘buy’ -
No, not until it can break upwards out of the pennant formation. Even then the share price will be in a weak position (and liable to sharp corrections) until it can break above the 243p level of the Sept ‘09 high.
Is it a ‘Short sell’ -
No, not until it falls, and closes, below 180p level should a short sell be considered. A close below 180p is likely to be followed by a fall to the 140p area.
Is it a ‘Hold’ -
Yes, just so long as it stays above 180p.
(click on chart to enlarge)
Weekly Chart
Daily Chart
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