The EasyJet share price is in a tight range as the global aviation industry recovers and as the company banks on staycations. The EZJ stock closed at 950p on Wednesday, which was slightly higher than the weekly low of 930p.
EasyJet introduces new routes
Like all airlines, EasyJet was affected by the pandemic as the company was forced to park its planes and raise capital to stay afloat. The pandemic pushed its share price to a record low of 405p in March last year.
Since then, the stock has done relatively well, rising by more than 130%. This price action was mostly because of the fast coronavirus vaccine development program and the expectations that the world economy will recover.
As such, investors believe that the company will record improved revenue in 2021 after it lost more than 1.3 billion pounds in 2020. In recent statements, the company has said that it is seeing robust demand for its services as countries ease lockdowns.
The company is expected to add 12 new routes, including to Newquay and Cornwall. The goal is to capitalize on the booming staycation business. Indeed, business activity in the sector has grown. For example, Blackstone announced that it was buying Bourne Leisure early this year while CVC Partners acquired Away Resorts for 250 million pounds. In a recent statement, EasyJet CEO said:
“The relaxation and removal of restrictions has sparked positive booking momentum across Europe, with the majority of our bookings showing a strong swing towards Europe when in normal times it would be a 50-50 split with the UK.”
EasyJet share price analysis
The weekly chart shows that the EasyJet share price has bounced back from its lowest level in 2020. The stock has managed to move to the 38.2% Fibonacci retracement level. It has also risen above the 50-day and 25-day exponential moving averages (EMA). The stock has also made a bullish channel that is shown in blue. At the time of writing, the stock is at the lower side of the channel.
Therefore, we can’t rule out a situation where the stock bounces back and retests the upper side of this channel at 1,100p. However, a move below the lower side of this channel will invalidate this bullish view.