Qantas Share Price Up 20% Today. Is Now the Time to Buy? (ASX:QAN)

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ASX QAN - Qantas Share Price

Just last week the future of Qantas Airways Ltd [ASX:QAN] looked bleak…

They temporarily stood down around 80% of employed staff…

They’ve cancelled international flights and halted many domestic flights.

Simply put, people were not travelling! And I don’t blame them either…

As for the Qantas share price, well it plummeted just under 75% since its February top.

But today, QAN shares are up over 20%!

So, you may be wondering is now the time to buy Qantas?

We’ll let’s take a look. But first…

Who is Qantas?

Qantas are Australia’s largest domestic and international transport service.

The company sells domestic and international holidays…

And does this through its companies Qantas Domestic, Qantas International, Jetstar Group, Qantas Loyalty and Qantas Corporate.

The company was founded in 1920. It employs around 30,000 staff members. And today has a market cap of $4.4 billion, using todays share price.

So why did the Qantas share price jump today?

Well, this morning Qantas provides investors an update.

The company said it secured a new round of debt funding to the tune of $1.05 billion.

No doubt, with income being demised for the company…it was important they rejigged their loans and liabilities.

And what better way to do this than obtain a loan against a ‘fleet of unencumbered aircraft[s], which were bought with cash in recent years.

The loans got a life period of 10 years and an interest rate of 2.75%.

And with this new loan, Qantas now has a cash balance of $2.95 billion.

We’ll see how this plays out over the next few months…

Anyway, let’s take a look at the company chart.

Take a look at it below…

What’s next for the Qantas Share Price?

ASX QAN - Qantas Share Price

Source: Trading View

[Click to open in a new window]

What you’re looking at above is the weekly chart of Qantas.

I marked three areas on the chart.

They’re Fibonacci retracement levels. It measures three critical points between the shares high price and the low price.

The point of these levels is to give us an idea where the share price may rise to and then fall…or rise to, pause and smash right through it.

I don’t believe you should be buying Qantas based on an announcement of debt funding.

You may want to wait for more confirmation that Qantas and its investors can look past COVID-19. And that the company can start to generate some revenue.

If that is going to happen, then the three lines on Qantas at $4.10, $4.74 and $5.38 will be good to watch.

Remember, if Qantas failed to breach any of these three levels, it could mean that the worst isn’t quite over yet.

You should what them. It’s what I’ll be doing.

As always, this is not a recommendation to buy or sell QAN. It is an update only. I hope you found it useful.

From my living room,

Jonathan Evans Signature

Jonathan Evans,
Analyst, Profit Watch

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