The EasyJet (EZJ) share price is struggling again today as investors question the speed of recovery of the global aviation industry. The stock has tumbled by more than 2% today after it dropped by more than 10%.
What happened: EasyJet is one of the biggest low-cost carrier in Europe. The company operates 981 routes, mostly in Europe. In 56 of these routes, the company holds a number 1 and 2 position. In 2020, the company had more than 3 billion euros in revenue, a sharp decline from the previous year’s 6.385 billion euros. This performance was expected since the company had to park most of its planes because of the pandemic.
In the past few months, however, the EasyJet share price has been in a recovery mode. By last week, it was up by more than 132% from its lowest level in November last year. It has lost some of these gains after some European countries started to implement new lockdown measures. Germany, where EasyJet has a substantial market share, has said that it will implement new quarantine measures. This has pushed the EasyJet’s and other airlines stock lower.
The daily chart shows that the EasyJet share price reached a high of 1,060p last week. Since then, it has dropped by more than 13% as investors worry about demand, especially in summer. Today, the stock dropped below the important support level of 950p, which was the highest level on December 4.
Most notably, it has dropped below the important support at 948p, which was the highest point on December 4. Therefore, the shares could continue falling as bears target the next key support at 850p. However, with the vaccination drive going on, we cannot rule out another rally above the YTD high of 1,060p.
