EasyJet Share Price May Experience A 23% Correction Soon
On Tuesday, easyJet share price broke below the 428p support level as bearish sentiment surrounded UK stocks. However, after retesting the August lows, the bulls stepped in, and the shares rebounded and were up 0.43% till press time.
Earlier on Wednesday, the FTSE 100 index gained 24 points after Tesco announced a 3% increase in its yearly profit forecast. However, the bullish sentiment was short-lived as the UK reported a fall in activity for the manufacturing and services sectors in the month of September. Consequently, the FTSE 100 is in the red again and showed a minor loss of 5.4 points at press time.
Italy’s Antitrust Body To Police Domestic Flight Prices
In September, The Italian Government delegated its antitrust body to manage the flight tickets for internal Italian flights. The body has the authority to fine and intervene whenever a ticket price is more than 200% above average. This proposal has been met with criticism from Ryanair and easyJet as it interferes with the freedom of airlines to set prices under EU regulations.
In other news, JP Morgan has recently decreased its target for easyJet share price. The American investment bank lowered its price target to 540p from 570p while keeping its “neutral” rating for the stock. Last month, Barclays also decreased its easyJet price target from £6.5 to £5.5.
EasyJet Share Price Forecast
A look at the price chart for LON: EZJ shows the price trading 3.1% below the 428p key support level after breaking under it in September. The price also got rejected from the range low of 458p and is currently trading 10.4% below the 200 MA level. These factors point towards a bearish easyJet share price forecast.
To prevent the outlook from flipping bearish, the bulls must reclaim the 428p resistance level. However, a breakdown below the September lows will be catastrophic and might open doors for a deeper correction towards the 321p.