EasyJet Share Price Looks Set to Trade at 12-Year Lows

Summary:

The EasyJet share price is facing the prospect of hitting 12-year lows if it declines any further in this week's trading sessions.

The EasyJet share price may not have traded on Monday due to Queen Elizabeth II’s funeral, but it looks to carry last week’s negative sentiment into Tuesday’s trading session, having lost 3.62% on Friday.

The EasyJet share price could face significant headwinds this week after market chatter after a strike by air traffic controllers in France forced EasyJet and several European airlines to cancel several flights. The strike by Syndicat National Des Controleurs du Trafic Aerien looks set to continue from September 28 to 30 and could reduce air traffic by more than 60% for flights into and out of the UK.

The EasyJet share price has had a nightmarish performance in 2022 as the airline’s operations has been dogged by thousands of flight cancellations stemming from strikes at London Heathrow, staff shortages and a range of other problems.

From a technical analysis standpoint, the measured move from the completion of the rising wedge pattern of June 30 – August 17 ought to have met completion at the 348.7 support level. This is the lowest the price action has been in over a decade. Recovery of the EasyJet share price will depend on whether the bulls can reject last Friday’s violation of this support.

The violation of the 348.7 support puts this pivot in jeopardy. However, a 3% penetration close below this support level is needed to confirm its breakdown, bringing 321.6 into the mix as a new support level. If the decline continues below this pivot, 287.1 (August 31 2010 and November 14 2011) enters the fray as an additional harvest point for the bears. Below this level, 255.8 (September 12 2011 low) becomes a new downside target.

On the other hand, a recovery move follows the failure of a clear breakdown of 348.7. This would favour a bounce toward 395.5 (June 27 and August 10 2022 lows). If the bulls uncap this barrier, 431.6 (August 16 high) becomes the next target to the north. A continued advance would see 472.0 becoming the new northbound barrier, while the 501.2 price target formed by the March 24/May 18 2022 lows becomes attractive on additional demand.