Rolls Royce (LON: RR) share price has been trading sideways for the past three months. The shares have broken above key resistance, but the bulls appear to have run out of gas. Rolls-Royce shares seem to be heading for a key retest on its chart.
On Thursday, Rolls Royce share price fell 4.8% in its biggest drop since March 2023. The bearish price action follows the 3.07 rise during its previous trading session. The UK stocks showed a mixed price action on Thursday as the benchmark FTSE 100 index remained sideways.
The Bank of England (BOE) is scheduled to make a decision on interest rates today. The markets are expecting a 25 bps rate hike which will be the 12th consecutive rate hike by the central bank. The reason behind this expectation is the soaring inflation in the country, which is the highest among the Western European nations.
Rolls Royce share price is expected to remain volatile for the rest of the day as markets try to absorb the upcoming rate decision. Nevertheless, we can still analyze its chart on a higher timeframe to remove the noise. According to Citi analysts, the shares have had a steady start to the year.
The following LON: RR chart shows a consolidation above the 146p resistance level. The consolidation above the resistance can be considered a sign of strength unless the price breaks below the resistance once again. In the coming days, the shares may retest 146p level, which will be very critical.
A successful bounce from this level will make Rolls Royce share price prediction very bullish. In such a scenario, the first target for the bulls will be the 170p-183p gap. A reclaim of this level may open the door for a bigger move till 200p.
I’ll keep sharing my updated outlook on Rolls Royce stock in my free Telegram group, which you’re welcome to join.
This post was last modified on May 11, 2023, 12:11 BST 12:11