This goes out to all Cebu Pacific investors, after the December 24-26, 2014 incident where more than 10,400 passengers got delayed or cancelled. The Civil Aviation Authority of the Philippines (CAAP) fined Cebu Pacific 52 Million Pesos (5,000 Pesos per passenger) for its lapses during the dates above.
This will add up to more woes to Cebu Pacific as the company ended negative for the 3rd quarter of 2014. One brightspot for CEB is that oil prices continue to drop and this will add to its margins.
What is Cebu Pacific’s chart telling us?
The stock is currently at the resistance, if it fails to go up above 84 we may expect the stock to drop back to 79. However if it holds and stays above 84, it may try to bounce and go to 89. The 84 Peso price range would now be interesting to watch to see if it holds or drops.
At the end of the day, this fine takes money away from the table for Cebu Pacific. How will CEB respond, let’s see in the next few days. Whatever it is, your goal as investor is to plan your trade and trade your plan!
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*chart via chart nexus
*chart via bloomberg