After an incredible run in the first half of December 2023, Rolls Royce share price is showing some weakness. The shares of the British jet engine manufacturer hit 313p last week before experiencing a pullback to 288.5p. Nevertheless, the buyers stepped in at the lows and the shares were up 0.79% on Monday.
The FTSE 100 index found support around 7,563 points, which was its 200-day moving average. As a result, there is a strong chance that the index might attempt to break above 7,685 points once again this week.
Rolls Royce shares closed at 292.4p on Monday as the UK investors remained cautious despite a strong rally in US equities. Technical analysis shows that the recent correction in LON: RR is not surprising and is a result of hitting a major high timeframe resistance.
According to the latest reports, Rolls Royce is going to supply small modular nuclear reactor technology to Ukraine. However, analysts don’t expect it to have any near term impact on the company’s profitability which is also evident by the recent price action.
The latest technical analysis reveals that while the bulls are still in control on the LON: RR chart, bears have started to step in. You can clearly see on the following chart how the price got rejected from the downward trendline and the 0.786 fib retracement level.
Even though Rolls Royce share price forecast is still bullish, the recent rejection has the potential to transform into a deeper pullback. However, the RSI is still not showing any bearish divergence on the daily timeframe, which means that there could be another retest of the monthly highs before a significant correction.
I’ll keep posting my updated LON: RR analysis on my X (Twitter) account where you can follow me.
This post was last modified on Dec 18, 2023, 20:43 GMT 20:43