Royal Mail (LON: IDS) share price continues its sideways chop as the union and leadership talks remain inconclusive. The shares have broken below a key trendline which may prove to be very bearish. Our analysis shows that the share can retest the 200p level if the workers go on strike in the coming days.
On Friday, Royal Mail shares turned green once again. After a 0.8% drop on Thursday, the shares were 0.54% up today. The current price is still 4.4% above its year opening despite a turbulent past few weeks. The positive LON: IDS price action can also be attributed to a bounce in FTSE 100 Index, which is up by 21 points today.
In the midst of the talks with the workers union, Royal Mail management is considering explosive moves. Recently, it has come to light that the leadership has threatened to declare insolvency if the ongoing talks remain inconclusive. It is still not clear whether it is just a political move or a serious consideration. Royal Mail share price has remained sideways amid this uncertainty on strikes.
According to the sources from the Communication Workers Union (CWU), a strike could be called as soon as within a day if the talks fail. In other news, Vesa Equity Investment recently disclosed its stake in International Distributions Services via its latest filing in March 2023.
As evident from the following chart, shares of International Distributions Services have broken below the upward trendline for the first time since September 2022. This trendline was acting as strong support as the price bounced off it many times. A major reason for this breakdown is the recent rejection from the 200-day moving average, which lies at 236.7p.
My Royal Mail share price forecast will remain bearish as long as the price remains below the trendline and 200 MA. Considering the current state of the daily chart, a retest of the 200p level appears more likely due to the recent breakdown.
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This post was last modified on Mar 31, 2023, 16:49 BST 16:49