The Franco-Dutch company Air France-KLM (EPA:AF) raises on Tuesday over 10%, reaching the €4.16 per share boosted by the optimistic expectation observed in its annual shareholder meeting.
On the technical side, AF exposes in its hourly chart and log scale an impulsive bullish movement after a downward sequence developed in three moves since February 19th, when the price topped at €10.02 per share.
The short-term picture under the Elliott wave perspective, reveals that AF developed a first aggressive sell-off identified as a wave ((a)) of Minute degree labeled in black. This first decline found support at €3.81 per share on March 16th, from where the price developed a pause corresponding to wave ((b)) in black, which carried to Air France-KLM to advance until €5.57 per share on April 07th.
Once completed the second corrective leg, the price of the airline company resumed its downward movement, starting to fail in its wave ((c)) at a lower speed than the first decline observed in wave ((a)).
The downward speed difference between waves ((a)) and ((c)) leads us to observe the alternation principle in terms of the price and time. In other words, while the first decline AF collapsed over 61% in a lapse of time near to 26 days, the second decline dragged to Air France to lose over 36% in 48 days.
After the breakout above the upper guideline of the descending channel, Air France-KLM started to show bullish signals, which suggests the short-term recovery.
On the other hand, the RSI oscillator illustrates an upward breakout over the upper resistance located at level 68. With this bullish breakout, we should expect a retracement, probably until the upper-line of the descending channel from where AF could find dynamic support, which could incorporate new long-side positions.
In conclusion, considering the strong upward momentum observed in the bullish breakout, our preferred positioning remains on the buy-side while the price remains above level €3.55 per share.