Throughout June, the news of numerous flight cancellations has impacted EasyJet’s share price. Today, the news cycle remains the same as the company struggles to meet the demands of all its customers.
Why is EasyJet Share Price Dropping?
In my EasyJet share price analysis article of June 23, I looked at the impact of the 11,000 flight cancellations for the company. In my analysis, I indicated that unless something drastic happened that addressed investors’ concerns about these cancellations, the EasyJet share price would continue plummeting. I predicted the prices would likely start trading below the 400p price level. If the issue remained unsolved, prices would continue to fall further.
Today, with no improvement, the Easyjet share price has continued to plummet, losing almost 10 per cent since my last analysis. Flight cancellations have also continued unabated, with daily reports showing disruption of services in some of its top destinations, such as Gatwick Airport.
EasyJet Share Price Analysis
In today’s trading session, EasyJet’s share price is down by 4%. The prices also look to have started an aggressive push to the downside after the last three days closed with a price gain. Looking at the chart below, the current strong bearish trend is evident. In addition, the Williams Alligator also gives strong signals of a strong bear move.
However, despite what the chart is showing, the key determinant of whether EasyJet’s share price will start to recover depends on what happens in the aviation industry. If the issue of flight delays and cancellations is resolved, then there is a high likelihood that a shift in negative reporting of the company could have an impact on the markets.
Fortunately, Transport Secretary Grant Shapps has repeatedly emphasized that they are looking into the aviation industry’s flight delay and staff shortage issues. When this is solved, we will likely see share prices start to recover. In addition, there is a high likelihood that the announcement will boost sentiments in the markets about the company, which will also improve the share price.
EasyJet Daily Chart
