Safran stock rebounds after a month down 8.5%, RSI strengthened to 42
The aerospace and defense engine manufacturer's share price recovers ground this Thursday, ranking among the best performers on the Paris index as the CAC 40 advances modestly. This rebound comes after several weeks of pressure, with the stock having lost more than 8% over the past month.
A rebound that is not yet sufficient to rise above short-term moving averages
Safran gains 1.2% in trading at 330.20 €, within a CAC 40 advancing 0.38%. The rebound follows a monthly decline of 8.41%, one of the most pronounced among the index's major stocks over the period. Despite this rise, the stock remains below its MA20 at 335.03 € (gap of -1.44%) and its MA50 at 339.54 € (gap of -2.75%), two thresholds that form a double mobile ceiling to break through for momentum to truly reverse.
The MA200 at 314.67 € plays a floor role instead, with the price trading approximately 5% above it. The RSI at 42 has rebounded sharply from the oversold level noted on September 11, without however crossing the neutral zone of 50, reflecting a still fragile recovery movement. The support at 321.60 € remains the bearish reference point to watch should selling pressure return.
A charged macro environment with rising Fed rates and global energy tensions
Thursday, September 17's session is unfolding in a strained macroeconomic environment. The FOMC raised its policy rates by 25 basis points today, to a range of 3.75%-4.00%, the first increase since 2023, justifying this decision by still-elevated inflation. Kevin Warsh furthermore suggested that another rate hike remained possible if upcoming data did not show sufficient disinflation. This monetary tightening tends to weigh on valuations of industrial stocks with high capital intensity, of which Safran is part. Meanwhile, European gas prices remain close to their 2022 highs, with TTF trading around 80 €/MWh, against a backdrop of European inventory levels well below seasonal averages and persistent disruptions around the Strait of Hormuz.
These energy tensions fuel production inflation, pressuring margins of industrials exposed to energy costs. In this context, the VIX declines to 15.93 versus 17.20 the previous day, signaling a relative easing of risk aversion supporting today's equity market rebound. Regarding analyst consensus, JP Morgan had raised its price target on September 11 during a session when the stock topped the CAC 40. The resistance at 363.60 € remains the medium-term technical target should the two short-term moving averages be broken through.
