$C6L Swing Trade Analysis

15 set 2020

In this post, I will be going in detail with regards to my view of C6L from a technical perspective.

As of the time that I am writing this post, C6L is trading at $3.560. I am fully aware that, right now, it may not be the best time to invest in the airline industry due to the uncertainties that surround it. We do not know when a vaccine will be developed, we do not know when a newly developed vaccine will be available for the masses, we do not know whether C6L will be able to survive the crisis, we do not know whether there will be a new wave of COVID-19 infection, we do not know when international travel will resume, we do not know how long it will take before travelers overcome the fear of getting infected and start traveling in the future. I can write a whole list of reasons why investing in C6L, or any airline company right now is too early.

As such, currently, I am bearish on C6L as long as international traveling is not widely allowed and COVID-19 vaccines are not available for the masses yet. However, despite being aware of all of the above, I still have small positions in C6L which averaged up to a cost price of $3.652. This is a very long term position that I entered with money that I am comfortable with losing. The reason I did so was that after doing my own due diligence, I strongly believe that C6L will be able to pull through the COVID-19 crisis because of its strong fundamentals and the financial backing that Singapore provides to the company. Singapore will not let C6L go under. Of course, this is a very speculative play on my part, so I hope that before you enter into a position into C6L, think twice, and ensure that you are able to stomach the potential downside that any airline industry investment can bring during such an uncertain period.

Technical Analysis
I believed that I have broken down the technical aspect of CCL's chart quite clearly in the candlestick chart above, but just to emphasis on a few things:

1. I strongly believe that if the support zone that I've marked with a star is breached + if everything else remains status quo, or possibly, gets worse, we will definitely revisit $3.200. If the situation remains the same or worse after the retest of $3.200, we will undoubtedly breach it and enter the $3.000 zone and beyond. As such, I believe that right now, we are at a very crucial level from a technical perspective.

2. This is similar to the first point, but I want to emphasize that the upside potential for C6L is bleak. All, if not most of the movements towards the upside will be extremely dependent on the news releases. Furthermore, even if there are news releases that positively impact C6L, the upward movement will not be sustainable unless the news is related to confirmation of vaccines being successfully developed and distributed, or if it is regarding a widespread resume of air travel.

3. I believe that currently, should COVID-19 eases and the demand for air travel rises, the fair value of C6L will be somewhere between $5.500 to $6.000. So, if prices of C6L push up, my profit target will be right around there.

4. Lastly, I believe that an optimal entry price will be whichever price that C6L is at when news of vaccines is made available in Singapore (or when there is a news release with a similar impact scale-wise). However, there's also the saying that "Time in the market beats timing the market". As such, you can still enter a small position at the current market price and slowly average down/up; but that is provided that you are able to stomach the possible downside that has still yet to come.

Disclaimer
I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor.
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