Trade oppurtunity26 Aug 2022 00:35
Hi all,
I know most of us have a long-term outlook on EZJ and travel stocks in general. I think most of us are also kind of surprised that travel stocks haven't rebounded as well as we hoped/thought.
Some possible reasons for this (travel as an industry):
1. Excess demand, yet due to extensive job cuts airlines are having problems accommodating for all customers.
- long-term this issue can be resolved as airlines continue to hire and train new employees.
- possible risks? Covid returning, causing airlines to cut jobs again and we are back to square one.
2. Jobs accommodating for hybrid work and/or less business trips
- not so relevant for EZJ ( i doubt many business-people are flying EasyJet for business trips)
"The latest survey of UNWTO global experts also shows 58 percent expect to see a rebound in the third quarter of 2022".
I think the quote above is what we are all thinking. The demand is there, just look at the photos of the mass lines in airports or use your own anecdotal evidence. It seems the experts believe that the airlines will soon be able to harbour the increased demand, and hopefully the travel stocks will rebound fairly soon.
On the technical side:
There is strong support @351p, being hit consistently since 2020. This can be traded up to the first line of support @373p (+7%), which has been hit again since 2020. More recently, the support line has been a bit higher @413p (+18%).
So if you're somebody who thinks there is still some bleeding for this company, I think a short-term trade like this may be beneficial. But along with the expert opinions from the UNWTO survey and excess demand, I think purchasing at this support level and $ cost-averaging in, could be a profitable play over the long term.
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