- Summary:
- After profit-taking brought downward pressure on Rolls Royce share price in the last week, but events this week set the stage for a reversal.
Rolls Royce share price continued with its upward momentum on Monday, as it went up by 0.6 percent to trade at GBX 552.0 at the time of writing. That strengthened the prospect of sustaining its reversal to the upside, following the recent downturn that saw it register successive weekly losses for the first time since early September.
As a result of the downward pressure, Rolls Royce (LSE: RR.) ended up accumulating 1.4 percent in losses in the last five trading sessions. However, a return above the GBX 550 mark is a significant boost to the market sentiment. Rolls Royce’s upside was rejected at the GBX 572 mark two weeks ago, not because of a change in its fundamentals but as a result of profit-taking by investors. Rolls Royce has gained 85 percent year-to-date, and it is therefore not unusual for investors to book profits at this point.
Rolls Royce maintains a healthy order book that safeguards its earnings outlook in the medium-term. The company had £4.1 billion in order backlog in 2023, and its profit is expected to hit £2.3 billion for the full year 2024. That could provide traction for further gains in the last quarter of the year. Meanwhile, Rolls Royce will give its quarterly trading update on November 7, and that will inject fresh volatility into the stock in the near term. Also, it will provide guidance on its likely performance in the medium-term.
Rolls Royce share price prediction
The momentum on Rolls Royce share price signals further upside above the 552.0 pivot mark. The upward momentum will likely meet the first resistance at 556.2, but an extended control by the bulls could break above that level to test 560.0. On the other hand, moving below 552.0 will favour the sellers, with initial support likely to come at 548.8. If the momentum strengthens, it could break below that level to test 545.2.
