Travel operator impacted by global unrest

By Graeme Dickson
Updated: 12:23 EDT, 2 March 2011

Travel operator Tui Travel (TT.) saw its stock recently break down through a technical level which might attract more bears to the stock:

The 20 day exponential moving average, pierced down through the 50 day exponential moving average and the 200 week exponential moving average yesterday.

The company has been impacted by the repatriation of holidaymakers and lost revenue from crisis torn Egypt and Tunisia, which it claims will cost Europe's largest tour operator between £25 million and £30 million in the current quarter.

Civil unrest in Egypt and Tunisia meant that TUI Travel stopped offering holidays from Germany to Egypt and Tunisia last month, although the service has since resumed.

On the other hand Spain, Turkey and Greece are experiencing a surge in demand as consumers look to take their holidays elsewhere.

As long as tensions remain in North Africa and the Middle East, it will give existing shareholders uncertainty as to how the company will absorb any future disruptions to its service.

On top of that it will have to stomach higher fuel bills for its air fleet as a result of the surging oil price, something British Airways under its new guise of IAG is painfully aware of.

Look for 200p to be tested, but if it closes above 260p, cut the position.

Update

Kazakhmys (KAZ) suggested to sell at 1448p. The stock closed yesterday at 1427p. Lower the stop based on a close above 1530p.

Mitchells & Butler (MAB)- 330.8p – the stock closed at 316.4p. Sit tight for now but if it closes above 340p look to throw the towel in: otherwise aim for a price objective of 290p.

Rank (RNK) – suggested as a sell at 126.5p – the stock closed at 130.7p yesterday after excellent results last Friday, while the outlook also was surprisingly strong given the UK's weak economic climate. Use the market's weakness as a way of exiting the stock with loss limitation in mind.

Debenhams (DEB) – suggested as a sell at 67.15p, the stock closed yesterday at 61.35p. Lower the stop to 64.5p as the stock is struggling to break through the 20 day exponential moving average.

Intertek (ITRK) – suggested to sell at 1799p, the stock went through the stop of 1860p and should be closed.

The writer does not hold any shares or derivatives in the above mentioned companies. The material for this report comes from Sharescope.