The easyJet share price declined sharply on Thursday after the budget carrier announced its half-year results. The stock declined to 957p, the lowest level since April.
easyJet earnings: In a report, easyJet said that its revenue for the six months that ended in March this year declined by 90% to 240 million pounds. The company made more than 2.38 billion in the same period a year ago. Passenger revenue declined by 91% to 170 million pounds.
The company carried 4.1 million passengers in this period. In its guidance, the firm said that it expects to fly about 15% of its 2019 capacity in the areas it operates. It expects the situation to improve in June as most countries continue to reopen. The firm also expects to save 400 million pounds in its cost cutting plan. In a statement, the company’s CEO said:
“With leisure travel taking off in the UK again earlier this week where we are the largest operator to Green list countries and with so many European governments easing restrictions to open up travel again, we are ready to significantly ramp up our flying for the summer with a view to maximising the opportunities we see in Europe.”
What next for the easyJet share price?
Early this week, I wrote that the easyJet shares were dangerously hanging above a key level of support. The stock was trading slightly above the ascending support that is shown in black. Today, it moved below this support, as shown on the daily chart below. At the same time, the stock dropped below the 50-day exponential moving average, which is usually a bearish signal.
The Relative Strength Index (RSI) has also formed a bearish divergence pattern. Therefore, in the near term, there is a possibility that the stock will keep falling as bears eye the next key support at 900p. However, a move above the resistance at 1,050p will invalidate this prediction.