AirBus at all time Lows!

Airbus has been one of the most affected by COVID 19 due to the restrictions on air travel however currently their stock price sits at all time lows. Over recent weeks airlines like delta have been retiring their fleets of boeing 777 aircrafts and using the A350 Airbus to replace it as it burns “21% less fuel per seat than the 777s”. We will be taking a closer look into the technical analysis of Airbus.

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Bollinger Bands

The Bollinger bands are an additional indicator used in technical analysis to detect volatility if the bands are close together then there is considered to be low volatility however if the bands widen then there is considered to be high levels of volatility. Also, it is very uncommon for a stock to move outside the Bollinger bands if it does, it will more often than not shift back inside the Bollinger band. In the graphic above we can see that the Bollinger Bands have narrowed and for now that suggests that the price is more stable and less volatile, again indicating that the price is likely to remain in this price range. Also as the stock price of Airbus is right at the bottom of the Bollinger band indicating that it is likely that price will rise to return back inside the bollinger band.

Relative Strength Indicator

The Relative Strength Indicator (RSI) is a specific indicator that is used to detect if a stock is over sold or over bought. The RSI is calculated using average price gains and losses over a given period of time. The default time period is 14 periods with values bounded from 0 to 100. A reading of below 30 means the stock is oversold highlighting a Bullish signal that the stock might rise in price. This is the case with Airbus indicating that it might be oversold, as it is right near at the bottom of the RSI Indicator level at 39 indicating that it may be likely to rise in the future.

Ultimate Oscillator

The Ultimate Oscillator tries to be very true to its name and is a technical analysis tool used to measure momentum across three different time frames. Simply put it is a way to measure buying pressure. When buying pressure is strong the ultimate oscillator rises and conversely falls when buying pressure is weak. The graph is formulated from the 3 different time frames giving the highest weighting to the short time frame but still factors in longer time frame. This is all done in an effort to minimise the affects of false positives seen in other oscillators that only use one time frame. To get some insights from this indicator we’ll be looking at the peaks and troughs of the graph, we can see that at the end of April and start of May there are two overbought peaks which shows a bearish diversion signal as the ultimate oscillator forms a lower high as the price of the commodity forges a higher high. However currently there is a oversold trough that is starting to shit upward which highlights a bullish buy signal and that the stock may increase in price.

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