I featured Flight Centre as a stock to watch on 20 May when it first began to test its 200 day moving average. At that stage it had not closed below the average since July 2012. After an initial bounce, the first close below the average came on 4 June and was followed by a near vertical move lower as concerns mount over the health of the consumers’ “discretionary” wallet.

Of interest now for chart followers, is Monday’s move by Flight Centre shares to quickly close the gap created by Friday’s lower opening. This is starting to look like an exhaustion gap. This possibility will look even more likely if price can develop a holding pattern around these levels for a while. Although the medium term downtrend still looks to be in place, an exhaustion gap might be the first signs of a corrective bounce that could give potential sellers a better opportunity

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