Is Aviva Share Price Poised to Hit the 500p Price Level?

Summary:
• Aviva's share price closed yesterday’s trading session with a per cent gain in the markets, resuming a strong bullish trend

Aviva’s share price closed yesterday’s trading session with a per cent gain in the markets, resuming a strong bullish trend that has seen its value surge by 18 per cent within the past one month. The current bullish trend resumption comes amidst reports that the rising costs that were pushing the price of motor insurance and causing financial pain for the company when underwriting was starting to ease. 

According to the reports, Aviva, one of the UK’s largest motor insurers, indicated that the drop in price of car replacements parts, labour and replacement cars, which had forced them to increase their car insurance, was starting to come down.  

Aviva’s chief executive indicated the company had increased its insurance prices by 5 per cent in the year due to these costs, which had hindered its motor insurance sales. The inflation rate has also resulted in the company’s personal insurance premiums remaining flat since the year started. Therefore, the reduced inflation rate combined with ease in the supply chain is likely to see the continued growth of Aviva.

Aviva Share Forecast

Today’s 1 per cent price gain in the market follows a strong bullish trend that resumed yesterday and which has seen the company’s value surge by 18 per cent in the past one month. The chart below also shows the current price surge is likely a trend reversal following a tough year that had resulted in the company’s value dropping by over 30 per cent before the bullish trend started.

Therefore, I expect Aviva’s share price to continue trading upward in the next few trading sessions. There is a high likelihood that prices will return to trade above the 500p price level within the next few weeks. A drop below the 430p price level will invalidate my bullish analysis.

Aviva Daily Chart