Benefitting from renewed interest in airlines, Air Canada (AC.TO) recently returned to the Green Favored Zone of the SIA S&P/TSX Composite Index Report and continues its climb up the rankings which started down in the red zone. The shares finished yesterday in 24th place, up 8 spots on the day and up 118 spots over the last month.
A year ago, Air Canada (AC.TO) shares were hammered in the COVID market crash as lockdowns sharply reduced air travel. AC.TO spent the middle of 2020 stuck at a low altitude while base building. Back in October, the shares embarked on a new recovery trend, staging a breakaway gap up through its 50-day moving average on massive volume and snapping a downtrend line. Following an initial rally, the shares staged a normal correction. Since establishing support near $20.00 back in January, the shares have been steadily ascending and yesterday, they broke through their November peak to close at their highest level in a year, confirming the start of a new upleg in a broader recovery trend.
Next potential upside resistance tests appear near $32.00, $36.50 and $40.50 based on measured moves from previous trading ranges. Initial support appears at the $25.00 round number.
Air Canada (AC.TO) shares continue to recover from last year’s massive price plunge that saw them lose around 75% of their value in a two-month period. Accumulation first emerged back in October, and a second ascent started last month. Building on a previous Double Top breakout, the shares have completed a bullish Spread Double Top breakout with a move back above $28.00 to trade at their highest level in a year. Currently, the shares are testing a long-term downtrend resistance line. A breakout over $29.70 would confirm the start of a new uptrend. Should that occur, next potential resistance tests appear near $34.75 based on a previous column high, $36.20, based on a horizontal count, and $40.75 based on a vertical count. Initial support appears near $26.90 based on a 3-box reversal. With a perfect SMAX score of 10, AC.TO is exhibiting near-term strength across the asset classes.
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