EasyJet share price analysis: April 18th will be crucial

EasyJet (LON: EZJ) share price will be in the spotlight this week as the company is set to publish its trading update for the first half of its financial year on Thursday. These figures come at a time when the stock is in the third consecutive week in the red as concerns about the aviation sector remain.

EasyJet’s shares initially jumped to the year-to-date high of 591.8p in March and has moved into a bear market by falling by over 13% to 512p.

EasyJet earnings ahead

The company is facing numerous challenges. While its traffic numbers are still strong, the company is facing substantial turbulence. EasyJet decided to cancel its flights to and from Israel after last week’s crisis in the region.

At the same time, the company is bracing for higher jet fuel prices as crude oil jumps. Brent, the global benchmark, has jumped to $90 while West Texas Intermediate (WTI) has soared to over $87 and analysts expect that it will move to $100.

Therefore, traders will be focusing on the upcoming financial results for the first half of its financial year. The most recent quarterly results revealed that the company had a loss before tax to £126 million, an improvement from the previous year’s £133 million.

Its passenger revenue rose by 22% from £1.4 billion in Q1’23 to over £1.8 billion in the first quarter of the year. The total airline revenue per seat rose by 3% to £70.39. 

Analysts are bullish on the EasyJet share price. Those at UBS have a buy rating on the stock. Similarly, JP Morgan and Deutsche Bank have a buy rating while Bernestin has a neutral rating on the stock.

Most analysts believe that EasyJet is in a better position than some of its competitors. For example, unlike Ryanair which uses Boeing, the company uses a fleet of Airbus A320 planes. As such, it is not seeing delays in its orders.

EasyJet share price analysis

EZJ chart by TradingView

The weekly chart shows that the EZJ stock price jumped to a high of 587.8p in March and has now retreated to 512p. It has dropped below the crucial support at 525.6p, its highest swing in May last year. It retested this level in a sign of a break and retest pattern.

The stock has moved below the 23.6% Fibonacci Retracement level at 536p, the 23.6% Fibonacci Retracement level. On the positive side, the 50-week and 100-week Exponential Moving Averages (EMA).

Therefore, I still believe that the stock will rebound ahead or after the financial results on Thursday. If this happens, the stock will likely retest the crucial resistance at 587p in the coming weeks. In the long term, the shares will likely rise to the 50% retracement point at 831.6p.