For the last three days, the EasyJet share price has been in the red, slipping nearly 9%. The company’s shares have declined more than 26% from their highest level this year. Its total market capitalization currently stands at £3.68 billion.
Airlines were among the hardest-hit sectors at the onset of the coronavirus in the past year. Planes have been on a halt for more than a year now, leaving massive holes in their operators’ balance sheets. Despite the vaccination rollouts, long-haul travel is quite far from normalcy.
The large amount of debts airlines have taken in the past year are also weighing heavily on the recovery of most airlines. However, analysts remain optimistic about the EasyJet share price. The British multinational low-cost airline group offered investors encouraging news in their Q3 results.
The company’s total cash burn in the third quarter declined to £55 million. Fixed costs plus Capex averaged £34 million per week, outperforming the £40 million per week guidance recorded at Q1. The company’s disciplined cost and cash management enabled EasyJet to maintain its net debt at £2 billion.
Analysts are hopeful that EasyJet will carry on with its effective cost management, which in turn will drive the company’s future profit margins higher. However, the uncertainty over the pandemic continues to haunt the travel sector.
EZJ Technical Outlook
The EasyJet share price has been trading below the descending trendline for the past two weeks. At the time of writing, the company’s shares inched 0.52% lower at 807.6p. It hit an intraday low of 793p before bouncing back.
On the daily chart, it is trading below the 50, 100, and 200-day moving averages, hinting at a bear turn.
Therefore, the bulls need to gain momentum to push the price to the resistance level at 884p. However, a move below the key support level at 753p will invalidate this view.