Like Stanley Thai before him, Tony's action did not work out quite as well as he has hoped for. Not only did Tony anger a whole lot of Malaysians - who are majority Airasia customers - his action could have no effect at all on the outcome of the election. In an economy where the common man is feeling the pinch from high cost of living, the last thing he wants to hear before he cast his ballot is the sweet advice from a billionaire. Gosh, what happened to Najib's savvy political team.
Anyway, the second episode to this saga has it that Tony was actually forced to endorse BN. Airasia's chair person, Rafidah & political wonder boy, Syed Saddiq have now spoken out in support of Tony. We will leave this story at that and look at the chart.
Airasia is in a long-term uptrend line, SS. I believe it will take a heavy knock tomorrow, which could possibly send the share price to the uptrend line support at RM3.30. That's a hefty 11% drop from its close at RM3.70. At this level, I think support should come in.
Chart 1: Airasia's weekly chart as at May 8, 2018 (Source: Shareinvestor.com)
AAX is the long-haul operation of the Airasia group. It is also the operation that's still finding its footing and is barely profitable. This stock has a tentative long-term uptrend line, SS with support at RM0.35. Since its close was at RM0.375, the uptrend line support at RM0.35 may not hold. If it breaks, AAX may test the lower line of its expanding triangle, ABCD at RM0.30. That's a hefty drop of 20% from its close. I seriously doubt this level of RM0.30 will be tested but if it did, it should hold.
Chart 2: AAX's weekly chart as at May 8, 2018 (Source: Shareinvestor.com)
Airasia is a Malaysian success story and a great export to the world. I sincerely hope that it would not be dragged down by Tony's endorsement of Najib & BN. The short-term weakness in the share price could be an opportunity for investors who want to get into the stock. Good luck!