Share prices look to continue to hold their divergent path for both Thomas Cook and TUI Travel PLC (LON:TT), according to the latest outlook, maintaining trends we have seen throughout 2014.
To us, Thomas Cook Group PLC (LON:TCG) looks increasingly bearish, especially next to the gains suggested by TUI Travel PLC.
When broader markets rallied around the middle of the year, Thomas Cook Group stocks failed to join them, a stubbornness indicative of bearishness.
In spite of this, the stock did consolidate around 123p, though now we have reason to believe it is wandering below this line, perhaps suggestive of a further drop into the region of 100p.
We foresee 130p offering some resistance, whilst present levels, and levels just north of them around 125p, are understood as support.
There may be reason to believe that Thomas Cook Group’s stock is oversold, judging by their sub-30 RSI (Relative Strength Index) reading. Oversold conditions could imaginably produce a bounce higher, but the negative signals that are being received from all other indicators create an unattractive scenario to bet on at such a time.
In a different mood, shares in TUI Travel PLC (LON:TT) remain chipper, riding the subsequent wave of a FTSE rally after bottoming last July at 353p. The stalling of this FTSE rally has however bought with it a stalling in TUI Travel share prices, though these declines are negligible, with TT being accusable of consolidating at worst.
If the mood of investors improves, then there is no reason to believe that a test at an ensuing convergence zone of 409p is not possible. Such a trend could make highs in 2014 of 440p a possibility. In the event greater pressure into the downside is encountered, look for support at around 370p.