An easing of the fears surrounding the Omicron variant of the coronavirus has lifted airline stocks, with the EasyJet share price up by 6.10% this Wednesday.
In what appears to be a dip-buying exercise, airline stocks on the FTSE 100 are seeing some muted demand this Wednesday, after early analyses by scientists and doctors attending to patients appear to show that the variant is not causing more significant illness in affected persons. Furthermore, travel bans have to a large extent, not been as sweeping as investors had feared, which could provide a silver lining to stocks such as EasyJet.
However, the EasyJet share price faces headwinds after the company reported a drop-off in its winter sales bookings. This also adds to the company’s annual pre-tax losses of £1.14bn for the year to 30 September, more than the £835m loss for the same period last year.
CEO Johan Lundgren provided a guarded outlook, saying that although the impact is below that seen during the previous lockdowns, it was too early to predict any ultimate impacts.
The recovery of the day came off a bounce on the 508.8 support level. More momentum is required to bridge the gap of 26 November, which would allow the bulls to aim for the 548.8 resistance barrier. 573.6 and 607.8 are additional price targets of note if the dip-buying momentum is maintained.
Sellers would rather see the upside moves as an opportunity to sell on rallies. This outlook would assume that rejection at any mentioned barriers would occur, ultimately pressurizing the 472.0 support level. If this support succumbs, 395.5 becomes the new target. There is also the potential for a pitstop at 440.0 (28 July and 6 November 2020 lows).