EasyJet shares rise sharply supported by Covid-19 vaccine news

EasyJet shares rise sharply supported by Covid-19 vaccine news
Written by:
Stanko Iliev
16th November, 18:26
  • Moderna announced that it has prospective vaccine which is 94.5% effective in preventing the COVID-19
  • EasyJet shares have advanced this Monday above $10.34
  • EasyJet is still a risky investment and the price could weaken again

Pharma company Moderna announced that it has a prospective vaccine which is 94.5% effective in preventing the COVID-19. EasyJet (OTC: ESYJY) shares have advanced from $7 above $10.34 in less than five days and the current price stands around $10.3.

Fundamental analysis: EasyJet will be able to survive the pandemic

EasyJet operates as an airline carrier primarily in Europe, the company has a fleet of 331 aircrafts and also engages in the trading and leasing of aircrafts. EasyJet shares have advanced this Monday above $10.34 and the technical picture implies that the price could advance even more.

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The US stock market hit a record this Monday thanks to news from pharma company Moderna saying its prospective vaccine was 94.5% effective in preventing the COVID-19. The stocks are also supported by signs of economic recovery in Asia and a jump in oil prices.

“Today’s vaccine news should make investors more tolerant of the surging virus cases, permitting them to look through to the strong dynamics that seem to be taking shape for 2021. The global population couldn’t have asked for more from the Moderna vaccine,” said Seema Shah, chief strategist at Principal Global Investors in London.

Despite this, the next several months will be competitive for the airline industry and the price of EasyJet shares could also weaken in the upcoming weeks. EasyJet reported that Q3 global company sales were down 99% from a year ago.

The negative results were impacted by the COVID-19 pandemic and the company announced that 727 of its UK-based pilots are at risk of losing the job. Deutsche Bank explains that European travel recovery is not easy to fix and this industry is facing difficult months.

With a $3B in cash reserves, EasyJet will be able to survive the pandemic, but the recovery will take years. My opinion is that this stock is still a risky investment and the price of EasyJet shares could weaken again.

Technical analysis: Bulls are in control of the price action

Data source: tradingview.com

On this chart, I marked important resistance and support levels. The important support levels are $9 and $8, $11 and $12 represent the resistance levels.

If the price jumps above $11 it would be a signal to buy EasyJet shares and we have the open way to $12. Rising above $12 supports the continuation of the bullish trend and the next price target could be located around $15.

On the other side, if the price falls below $8 it would be a strong “sell” signal and we have the open way to $7.

Summary

The US stock market hit a record this Monday thanks to news from pharma company Moderna saying its prospective vaccine was 94.5% effective in preventing the COVID-19. With a $3B in cash reserves, EasyJet will be able to survive the pandemic, but the recovery will take years. My opinion is that this stock is still a risky investment and the price of EasyJet shares could weaken again.

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