Safran and Airbus lead the sector into a downward spiral
The two heavyweights in the sector bear the brunt of the damage. SAFRAN, the largest market capitalization in the panel with over 118 billion euros, drops by 18.89% in a month and further declines by 3.96% this Friday, with an RSI falling to 21 – deeply in oversold territory. AIRBUS shows a similar RSI (20) and declines by 14% over the period. DASSAULT AVIATION and Thales limit the damage to around -6.5% to -8% over the period, but also drop significantly today (-4.29% and -2.73% respectively).
The entire Parisian market is under pressure at the end of this week: the CAC 40 closes down by 1.82% and the SBF 120 by 1.80%, in a climate of high tension illustrated by a VIX at 25.09, up more than 12% in two days. The military escalation in the Middle East, with the surge in Brent and the paralysis of regional air traffic, fuels risk aversion and hits the aerospace-defense giants hard, exposed to disruptions in logistics chains and rising energy costs.
Only a few niche values resist: EXAIL TECHNOLOGIES (RSI at 64), EXOSENS or Explosives and Chemical Products (EPC) manage to stay above their long-term moving averages.
Oversold market: signal of a technical rebound or continuation of the correction?
The sector’s technical picture calls for caution. The sector’s weighted RSI stands at 27.8, in a marked oversold zone – a level that historically can precede a technical rebound. However, the fundamental signals remain degraded: the weighted average price is well below its 50 and 200-day moving averages, reflecting a bearish momentum on the medium and long term.
There are no shortage of potential catalysts – including the “Free France” aircraft carrier program worth 10 billion euros involving more than 600 subcontractors – but the context of geopolitical stress and high market volatility maintains selling pressure on large capitalizations. The current correction far exceeds that of the market, which could indicate that the sector has been subject to profit-taking after a previous outperformance phase.
At present, the technical balance of power leans more towards a continuation of consolidation than an immediate turnaround.
