To The Moon

The decline of $SINGAPORE AIRLINES LTD(C6L.SI)$ stock this week may have the following reasons:

• According to its latest financial report, its net profit for the first quarter of 2023 was 614 million SGD, which increased by 1,082.35% year-on-year, but mainly due to the low base effect caused by the heavy impact of the pandemic in the same period last year2. Its operating revenue was 4.68 billion SGD, which increased by 95.46% year-on-year, but still lower than 9.85 billion SGD in the same period in 20192. In addition, its passenger volume was only 7.5% of the same period in 2019, while its cargo volume was 88.4% of the same period in 20192. These data show that Singapore Airlines still faces huge operating pressure and challenges.

• Threat from competitors: Recently, India’s Tata Group announced that it will merge its two airlines-Air India and Vistara-to create a more powerful airline group. Vistara is a joint venture between Tata Group and Singapore Airlines, so the merger also involves the interests of Singapore Airlines. According to reports, the merger has been approved by India’s antitrust agency (Competition Commission of India). The merger will enable Tata Group to have a larger share and influence in both the domestic and international markets in India, thus posing a potential competitive threat to Singapore Airlines.

• Unfavorable technical analysis: From a technical analysis perspective, C6L SG stock showed a signal called “death cross” this week. Death cross is a pattern formed when a short-term moving average (such as 5-day or 10-day line) crosses below a long-term moving average (such as 50-day or 200-day line), which usually indicates that the stock price will enter a downtrend or accelerate downward. C6L SG stock showed a death cross signal on Monday (September 4, 2023) when the 5-day line crossed below the 50-day line, which may have triggered some investors’ panic selling and led to the stock price decline.