European stocks were pressured yesterday, following the escalation of tensions between the bloc and Belarus. On Sunday, Belarus forcefully diverted Ryanair Flight FR4978, flying from Athens to Vilnius, which sparked international outrage.
Nevertheless, the stock price of Ryanair managed to recuperate today following the session's open. This was mostly due to the swift reaction by European states, with some officials decrying the act as "hijacking" and "piracy".
The price action of RYA has been range-trading for quite a while now, mostly being concentrated between the major resistance level at 17.100 and the major support at 15.100.
Even though the political spat did not send the stock tumbling down, the uncertainty exacerbated the sell-off in the short term. The share price has been developing a descending Flag pattern over the last several days.
Nevertheless, the massive Marabozu candle that is forming today could potentially indicate the termination of the sell-off. Moreover, Ryanair's stock may be due for another attempt at breaking the range and continuing to climb higher.
That is so because the Flag, as a classic trend continuation pattern, is found after a Wedge. The latter represents a type of pattern that is commonly found at the lower end of a downtrend or range, thus elucidating the potential for further price hikes.
Market bulls should not disregard the fact that the Stochastic RSI indicator is nearing its overbought extreme, which, given the still prevailing range-trading sentiment, could prompt yet another reversal.
For more risk-averse bulls, the most optimal thing to do would be to wait for the price to pull back to 17.100 following a decisive breakout, which would underpin robust buying sentiment in the market.
Ursula von der Leyen, President of the European Commission, announced that member-states of the EU would be imposing stricter sanctions on Belarus, including the closing of European airspace to Belarusian flights and tougher economic sanctions.
#EUCO leaders acted forcefully in response to the outrageous actions of the Belarus regime.— Ursula von der Leyen (@vonderleyen) May 24, 2021
We are closing our airspace to planes from Belarus & call on EU airlines not to fly over the country.
Further economic sanctions will be presented soon.
The forceful diversion of flight FR4978 by Belarus, carried out by the incursion of a Mig-29 fighter jet, was done so that regime authorities could arrest Raman Pratasevich, a prominent journalist and opponent of the authoritarian President Alexander Lukashenko.