Qantas - ready for takeoff?
Qantas (QAN) was the first stock I ever bought. I didn’t know much about technical analysis back then. I thought fundamental analysis was where it was at. To me, Qantas was the perfect stock to buy. A great Australian company with little competition - the perfect stock to buy right? Wrong!
I bought QAN back in 2002 just as it fell below the $4 mark. That was my first mistake. Round numbers are magical things in the stock market. They often represent floors or ceilings (read: support and resistance), depending on which way the trend is going. I thought QAN would find support at $4. Instead it broke through the floor and plummeted down and down… until now.
It’s taken just over 3 years for QAN to return to the price I bought it at. And yes, I still hold a position. Why would I keep hold of a losing stock so long? Simple. Because I didn’t know any better. By the time I learnt I should stop my losses those losses were too great - and QAN was still returning some nice dividends that were comparable to the interest I’d have earned having that money sit in the bank (ie. around 4-5%).
As I write this article QAN sits at $4.05. If I closed my position now I’d do a little better than break even (after brokerage). It’s very tempting, but maybe there’s more steam left in QAN..
Moving average fans would certainly like the recent price action as shown in the chart above. I quite like it too.. 
This rising triangle would also seem to be a good indicator.. a verybullish sign indeed.
This chart doesn’t tell much but for those of you looking at QAN charts it should be pointed out that the large volume you see during September 2004 was simply British Airways offloading it’s position in Qantas. If there was a volume like this during normal trade it would be considered a very important volume indicator.
Conclusion
Despite fairly positive technical signs, I think QAN may still struggle to break into blue sky territory (ie. it may have problems breaking record highs or even struggle to get through $4.80). For now though, I’m going to ride the trend as far as possible with a stop loss not that far behind.
As always, remember these are simply personal views aimed at helping educate and do not represent financial advice in any form..
March 10th, 2006 at 2:14 pm
[…] As mentioned in my previous article about QAN, I bought the stock when I knew nothing about trading or investing back in 2002. I watched the price tumble to go below $2 due to the fact that I didn’t have a stop loss in place. This was a stock I really wanted to get rid of. […]