Why easyJet shares are flying backwards
21st December 2021 08:32
by Alistair Strang from Trends and Targets
Share on
Shares in the budget airline are a long way from both their peak in 2015 and the 12-month high above 900p. Independent analyst Alistair Strang checks his radar for recovery potential.
It presently feels like share prices for easyJet (LSE:EZJ) and Ryanair need no further assistance to ‘talk it down’, the current lockdown scare appears to be stepping in the role quite nicely.
easyJet's share price looks poised for another hammering. In terms of ‘closing price’, the share is currently messing around at the level of the pandemic low of 2020, looking dangerously close to another thrashing.
On the day of the pandemic crash, easyJet hit 410p, but actually closed the day at 507p. At present, the share price needs to descend below 457p to risk triggering further reversals to 301p. We’d hope for a bounce at such a level, if only due to such a reversal essentially matching the lows of the financial crash.
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There’s a serious issue if the share price discovers an excuse to close a session below 301p. It risks a visit to an ultimate bottom of 45p thereafter. Generally, when such a massive void exists between target levels, we tend to expect a proper bounce at the initial target, in this case 301p.
Source: Trends and Targets. Past performance is not a guide to future performance
However, there are early signs our dreadful scenario above risks being too dramatic.
Currently, the share need only exceed 515p to allegedly enter a cycle to an initial 551p. If bettered, we can feel more confident extrapolating a future 677p as a major point of interest.
Unfortunately, for the present, easyJet's stock price shares a lot with folk who’ve been through their customer service process. It’s not happy!
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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