Clear skies for Flight Centre

The August international passenger data saw numbers seasonally adjusted, increasing by 8.2% year-on-year.

- Fundamental continue to stack up

- Uptrend still intact

- Support $46.78 and $42.26, Resistance: $50.63

Passenger data

The recent monthly growth trend also continued, with August travel numbers up 2.3% month-on-month, with the bulk of the travellers coming from Asia, the US and the UK.

The recent fall in the AUD has helped Australian tourism numbers shift higher. The growth in international passenger arrivals is illustrated by the moving average growth rate which hit its highest level since November 2005 at 5.8%.

Fundamentals stacking up

This certainly bodes well for Flight Centre's (FLT) first half earnings; historically FLT store growth is coupled with amplified travel numbers. The increase in travel numbers should be supportive of earnings as FLT is leveraged to flight and accommodation booking through commission tie ups with airlines and hotels, expectations are for strong organic growth over the half and quarter which has led to broker upgrades.

Bloomberg is currently reporting that only two brokers have a sell on the stock while nine brokers have buy recommendations and eight holds. Credit Suisse is leading the price target call of $54 over the next 12 months.

Uptrend Still intact

The strong upwards channel is well intact, even with a small pull back looking likely to continue over the next three months. I see support around $47.10, which is the top of the highs in August and dips in September. Resistance is likely to be around the all-time high of $50.63, however this could be broken if earnings expectations are met at the November release.

One year chart of the uptrend channel of FLTOne year chart of the uptrend channel of FLT

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