AirAsia Updates

Share price for AirAsia is now at a crossroad.

The MACD indicator is still bullish with the indictor above its signal line. However a worrying sign is a weakening MACD histogram. This shows that the upward move is losing momentum. And from the price chart, we can see that the chart is now looking to form a lower low. RSI is at neutral level. Stochastic indicator is showing weakness in the short term.

The price action is showing weakness as well. The stock price could not hold above the downtrend line and is now about the test the support line.

Critical support is at RM1.25 level. The resistance level is at RM1.35.

AirAsia - Still in a downtrend

AirAsia rebounded for the last 3 session. However, the bearish pattern formed by the 10 day, 20 day and 30 day moving averages is still intact.

The rebound can be viewed as a technical rebound and the fact that it is not able to clear it's 20 day and 30 day moving averages is a sign that the bears are still in control.

There is a high possibility that the price will test RM1.27 in the next few sessions. If this level is taken out, the next support is at RM1.22 level.

All bets are off if price moves above RM1.37.

Air Asia Case Study

Oil price has gone up from about 100 USD in the beginning of the year to 124 USD. That is an increase of around 24% just for 2008. High price oil will affect the earnings of companies that rely on oil for operation, example airline and transport companies.

Let’s look at the chart for Air Asia.


The stock closed at RM 0.99 yesterday. The price is currently below the 50 day, 100 day and 200 day moving average. A bearish sign.

The RSI has been below 30 since the beginning of May 08. However oversold doesn’t mean it will not go down further as illustrated by the chart.

The short term stochastic signal is showing some positive sign. But it seems to be moving down again. The bulls just do not have enough strength to push the price higher.

If you are looking to buy this counter, it is best to wait for the MACD indicator to do a crossover.