The EasyJet share price has pulled back in the past few weeks amid worries over the surging coronavirus cases. EZJ shares have slipped 24.80% from their highest level this year on May 7. The airline company has a total market capitalization of around £3.90 billion.
Just like all European airlines, EasyJet’s biggest concern is the surging cases of the coronavirus alongside the highly contagious Delta variant. The week’s average of new coronavirus cases has been above 25,000. The robust growth in new cases has markets worried that the strong demand for flights will reduce as people opt to remain indoors.
The British multinational low-cost airline group lost more than 1.3 billion pounds in 2020. The declines followed the strict lockdown and travel restrictions laid down by the British government. However, with the easing of lockdown restrictions in the first two quarters of this year, the company’s revenue jumped.
EasyJet published its earnings for the third quarter on July 20. Its earnings were in line with analysts’ estimates. Its total cash burn for the quarter shrank to £55 million. Fixed costs plus capital expenditure averaged £34 million per week, outperforming the £40 million in Q1. EasyJet’s capacity in Q4 is expected to be up 60% of 2019 levels.
EasyJet Share Price Outlook
The EasyJet share price has been bullish since the start of August forming a bullish falling wedge. It broke out of the pattern to the upside and hit an intraday high of £8.48 before slightly pulling back.
It closed Thursday’s trading session 3.17% higher at £8.47. It was trading below the 25 and 50-day exponential moving averages which is bullish. Its Relative Strength Index (RSI) moved higher at 61.80.
If the price moves past the resistance level at £8.50, the next target will be the £9.00 level. However, with the rising cases of the Delta variant, the price could slip to find support at £8.06.