The Rolls-Royce share price started the week badly as investors remained concerned about the health of the aviation sector. The RR tock declined by more than 5% and ended the day at 100p, which was the lowest level since May 20. The shares have fallen by more than 20% from their year-to-date high.
Rolls Royce news. Rolls-Royce is a leading industrial company headquartered in the UK. The firm makes most of its money from the civil aviation sector. Its other revenue comes from the military and power sectors. As a result, the company’s shares declined sharply in 2020 as airlines were forced to halt their businesses. This direction had a major impact on the company because it makes most of its money from long-term servicing contracts.
The Rolls-Royce shares has declined sharply in the past few days as investors remain concerned about the aviation sector as the delta variant continued to spread. As a result, more countries announced fresh curbs for people traveling from the UK. UK citizens traveling to Spain will need to present a negative Covid test or go throug two weeks of quarantine. Other countries are expected to announce similar measures.
As a result, airline shares declined sharply on Monday. IAG, Tui, and EasyJet declined by more than 5% while in the United States, airline shares of companies like United Airlines and American also fell.
Last week, I wrote an article on the RR share forecast which I focused on these issues. I concluded that the stock would remain rangebound with a bearish bias. This prediction was accurate as the stock crashed hard below the lower side of the channel.
The stock has moved to the psychological level of 100p and dropped below the 50-day and 200-day exponential moving averages (EMA) on the daily chart. This is a sign that bears are getting control. At the same time, the Relative Strength Index (RSI) has moved from the overbought level of 70 to the present 37. Therefore, the shares will likely keep falling as bears target the next key support at 90p. In the near term, however, we can’t rule out a situation where a relief rally happens.
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