IAG shares (ASX: IAG) have made a sharp pullback since the latest performance update, down 16.33% over the past 5 trading sessions.
The share price has found technical support and resistance in the $7.40 region in the past, and hit a low of $7.42 in today’s session before ending the day at $7.53. Whether the level will hold, or falter could prove a vital clue to the next period, with the shares having been in a longer term uptrend leading into the report. IAG’s shares have added 22% in the past 12 months, having recently made a new all-time-high of $9.21 at the end of January.
The financial performance of IAG for the first half of FY25 was not as bad as one might think based on the stock movement. The net profit after tax increased by 91.2% to $778 million, alongside a 55.9% increase in insurance profit to $957 million. Additionally, the interim dividend was raised by 20% to 12 cents per share.
The recent decline in IAG’s share price might appear to offer a strategic entry point for investors, but it also comes with considerations of the broader market trends and risks. As you would expect, fundamentals play a significant role in the trajectory of a company, and support and resistance levels can be broken just as quickly as they are made. Significant support around a key level that holds firm, on strong volume could be an indication of a pivot, but after such a run, a pullback can also be considered healthy.
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