The Rolls-Royce share price will be in the spotlight on Monday as the Delta variant continues spreading. Other FTSE companies to watch will be those in the aviation sector like IAG and EasyJet and those in the hospitality industry like Whitbread and InterContinental. RR shares ended the week at 107.52, which was below last week’s high of 113.55.
What happened: Rolls-Royce Holdings is a major player in the aviation industry as one of the biggest suppliers of jet engines. The company does well when airlines do well because it makes most of its money from servicing jets. Therefore, its share price tends to react to new updates on the pandemic.
The biggest worry among investors is that the new Delta variant has started to spread rapidly. According to the Financial Times, the variant has become dominant in Portugal and is spreading across other European countries like Germany, France, and Spain. As a result, European health officials have warned that governments needed to do more to slow the spread. The new variant now accounts for about 96% of all sequenced infections in Portugal. In a statement to the FT, the French Finance Minister said:
“We are in the process of crushing the virus and crushing the pandemic, and we must in no way let the Delta variant get the upper hand. You might say this is still low but it is similar to the situation in the UK a few weeks ago.”
As such, there is a possibility that the Delta variant will lead to more lockdowns, which will affect the aviation sector.
The four-hour chart shows that the RR share price has been in a tight range recently. The stock ended the weeks at 107.52, where it has been in the past few sessions. The price is also along the same level as the 25-day and 15-day exponential moving averages. At the same time, the two lines of the MACD are slightly above the neutral line. It is also slightly above the lower line of the ascending channel.
Therefore, the shares will likely remain inside this range today. Still, a break below the lower side of the channel will signal that there are more bears in the market. Such a move will open the possibility of the stock falling to the next support at 100p. The alternative scenario is where the stock rises to the upper side of the channel at 114p.
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