Buying Ryanair at Low Altitudes Can Be Dangerous
The airline is sinking fast, and I wouldn't buy it here, even if the tickets are cheap.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Ryanair Holdings RYAAY is trading lower Monday by nearly 18% as investors react to news that the airline reported sharply lower first-quarter profit, hit by higher operating costs and weaker-than-expected air fares.
Let's tighten up our seat belt and check on the charts and indicators.
In this daily bar chart of RYAAY, below, I need to imagine prices trading around $98. Prices are trading at a new low for the move down in the pre-market. Prices are trading below the declining 50-day moving average line and below the creasing 200-day moving average line. The On-Balance-Volume (OBV) line has weakened since February. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line and poised for a new downside crossover.
In this weekly Japanese candlestick chart of RYAAY, below, I see a picture that looks vulnerable to further declines. Prices trade below the 40-week moving average line. The weekly OBV line shows a decline beginning in April as traders become more aggressive sellers. The MACD oscillator is in a bearish alignment below the zero-line.
In this daily Point and Figure chart of RYAAY, below, I can see a downside price target in the $107 area. Prices are likely to overshoot this price target on the opening Monday.
In this weekly Point and Figure chart of RYAAY, below, I used a five box reversal filter. Here the software suggests a bearish price target in the $61 area.
Bottom line strategy: Some traders may be inclined to buy a sharply lower opening on RYAAY, but that would be ignoring the downtrend and weak technical indicators. Traders should wait for RYAAY to come to a complete stop at the gate before unbuckling their seat belts. Avoid the long side of RYAAY.
Employees of TheStreet are prohibited from trading individual securities.