No-frills airline EasyJet EZJ is interesting at the moment, and I notice that John Rosier has decided to halve his holding
(http://is.gd/NOdLNe).
I had actually sold out of my EZJ in Aug at 1204p. There was a distinct indication that momentum was broken, as the company had started to make lower highs and lower lows.
I was expecting the negative momentum to continue, but I was wrong. The shares have rebounded, and have since channeled in the range 1200p to 1350p approximately. In common with many many shares that had shown a good spurt in the early part of 2013, the shares are back to where they were around May time.
We are at a very interesting juncture at the moment. 1200p seems a support level for the shares, and also coincides with the 200dma. So it looks like a buy from a technical perspective … at least I would call it a bad shorting idea, especially since the share price is supported by fundamentals.
On 30 October, Barclays raised its price target to £15.30 – and I think I can see where they’re coming from on that, and would basically agree. EZJ has been on a typical PE of about 15, and analysts have forward earnings of 105.84p for 2014. So £15.30 would fit in with that.
I should emphasise that I am purely talking to my hat on this one, and have no holding.
Should be interesting to see what happens.
Mark Carter's blog 