From around the end of February, the easyJet stock (LON: EZJ) had been drifting lower and trading below a medium-term downside resistance line taken from the peak of February 26th. But this was the case up until yesterday, when the stock finally managed to break above that downside line and move further north. The stock is also now balancing above a short-term tentative upside support line taken from the low of June 26th. EZJ found some resistance near the 1051.50 zone, marked by the high of May 10th. At the time of this analysis, the share price is currently slightly below that zone. We will remain somewhat bullish, at least in the short run. But before aiming for higher areas, first, we will wait for a confirmation break above the 1051.50 barrier.
As mentioned above, a push above the 1051.50 barrier may open the door for some higher levels, as the move would confirm a forthcoming higher high on a shorter timeframe. This is when we will target the 1078.00 obstacle, a break of which may help the stock to continue with its path north. EZJ could then hit the 1106.50 hurdle, marked by the low of May 3rd. The share price might stall around there, or even correct back down a bit. But if there are new buyers coming in and the current ones are not liquidating their positions, EZJ might rise again, potentially breaking above the 1106.50 area and aiming for the 1130.00 level, marked by the high of May 3rd.
Our oscillators, the RSI and the MACD, are somewhat in support of the upside scenario. The RSI is above 50 but has somewhat flattened now. The MACD is showing a slightly clearer direction, as it is above zero and its trigger line, at the same time pointing to the upside.
Alternatively, in order to shift our short-term outlook to the downside again, we would like to see a price-drop below both of the aforementioned lines, the short-term upside and the medium-term downside ones. This way EZJ could clear the path for itself to move in the southern direction, targeting the 946.80 zone, marked by the lowest point of July (so far). Initially, we may see the stock holding around there, or even rebounding back up again. But if there are no takers of the stock even at that price, we may see another leg of selling, which could push EZJ below the 946.80 obstacle and aim for the 899.80 zone, marked by the high of June 21st.
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