The Rolls-Royce share price is up by a percentage point in the early hours of today’s trading session, extending a trend that started in mid-October, which has seen the company value rise by over 30 per cent.
The recent company growth comes amidst a string of positive fundamental factors, including the recovery of the aviation industry, which makes up most of the company’s profits through servicing and upkeep of flight engines.
The recovery of the aviation industry has also seen the company sign a string of contracts with aviation players, including an agreement with China Eastern Airlines, which will see Rolls-Royce tasked with servicing 10 Trent 700 engines. The company has also signed deals with Malaysia Aviation Group and Air China in recent weeks, which has partly contributed to the current bullish trend.
Recent reports also indicate the company is calling on the UK government to enter into formal negotiations over their plans to build small nuclear plants. If the talks and negotiations are successful, an agreement will see Rolls-Royce being commissioned to build small nuclear plants, which data shows will cost £2.5 billion. Although these plants will not be operational until the early 2030s, an agreement will see the company’s share price surging, as investors become more optimistic about the company.
Looking at the chart below, the past few weeks have been aggressively bullish, which has seen the company’s value rise by 37 per cent. Today, the weeks-long bullish trend looks to continue, with Rolls-Royce already up by a percentage point.
The recent price action also shows a likelihood of the continuation of the current bullish trend. The bullish sentiments are also supported by indicators such as the Williams Alligator, which currently signals a continuation of the strong bullish trend.
Therefore, in the next few trading sessions, I expect the current aggressive bullish trend to continue. There is a high likelihood we might see prices returning above the 100p price level by mid-next month. However, dropping below the 86p price level will invalidate my bullish analysis.
This post was last modified on Nov 24, 2022, 11:40 GMT 11:40