After falling and being grounded since its listing with the Philippine Stock Exchange, Cebu Air, Inc. (CEB) looks like it may finally take off. After temporarily lifting by 5.6% from its IPO price of Php125/share during the first day of its trading, CEB has gradually fallen. In September 2012, it hit a low of 52.45 before rallying back above the Php60 level. From August 2012 to present, it appears to have been forming a cup and handle pattern with a neckline at around Php63.50. The Php65 mark looks to be as an established support as seen in the past hence could act as an immediate resistance for CEB. At present, CEB is already knocking at the pattern’s neckline and a breakout from this level could happen any time soon. Still, CEB has to move past Php65.00 for it to freely move higher. In any case, a breakout from the cup and handle pattern may send CEB to around Php75.00. A failure to move past Php63.50, on the other hand, may send it back to Php60.00.
On the fundamental side, CEB is just trading at around 11x forward P/E, the cheapest among the other service stocks (industry avg of ~19.4x P/E). This could act as a catalyst for CEB to rise.
Let us see. Caveat.