IAG shares (ASX:IAG) fell back to start the week, closing 3.24% lower, as a broad-based retreat across ASX 200 financials prompted investors to lock in gains into earnings, following a strong rally that had lifted the stock 24% from early March lows.
The IAG share price rounded out the first trading session of the week at A$8.35, with trading volume 42% above the stock’s average daily turnover. The decline saw shares make a break below the 30-day simple moving average of A$8.38, a technical threshold closely watched by momentum traders.
The RSI has cooled to 47.8 from overbought territory above 72 at the end of July, with profit-taking accelerating as sector-wide concerns cast a shadow into a busy week of bank earnings.
The move came as the broader financials sector sold down heavily, with Westpac Banking Corporation leading the rout following its earnings release. Despite Monday’s setback, IAG remains 4.51% higher year-to-date after a volatile 2026 that has seen the stock swing from a 19% decline through early March to a subsequent 24% rebound into last Friday’s close.
Monday’s sell-off in appears driven primarily by contagion from broader financials weakness, with Westpac’s earnings release acting as a catalyst for a more risk off tone to the sector with many major earnings releases set to drop this week.
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From a technical perspective, the break below the 30-day moving average on elevated volume represents a meaningful shift in short-term momentum. While the stock remains in positive territory year-to-date, the failure to hold this support level raises the risk of deeper mean-reversion, particularly if the broader financials sector remains under pressure. The RSI’s retreat from overbought levels above 70 to neutral territory around 48 suggests the stock has room to move in either direction without hitting extreme technical conditions.
All eyes will turn to Wednesday’s earnings report, but until then, we can expect the stock to trade in sympathy with some of the other big sector names in today’s session, with CBA putting up numbers.
