Royal Mail (LON: IDS) share price is still trading sideways amid a failed round of negotiations between the Communications Workers Union (CWU) and the company. The exact reasons for the failure are still disputed, as both parties blame each other. The situation has put the possibility of more strikes by CWU on the cards.
The shares of the International Distribution Services (previously known as Royal Mail) have also been affected by the pay dispute between the company and CWU. Currently, shares are trading 9.9% below their March 2023 highs.
The leaders of the Communications Workers Union had already been considering more strikes in case the talks remained inconclusive. Moreover, in a recently held poll, the CWU also got the mandate to take further action. Therefore, we can expect more Royal Mail strikes in the coming weeks.
On Thursday, Royal Mail share price rebounded from its monthly lows and gained 2.97%. Till press time, the shares were changing hands at 225.1p as other major UK equities also showed positive price action. The benchmark FTSE 100 index was also up 1.05% after gaining 80 points.
The chart of LON: IDS shows a sideways price action after a breakdown from the upward trendline. Such consolidations often result in another downward push. If this happens, then I expect the International Distribution Services shares to drop to 200p soon. The confluence comes from the key psychological level and the presence of December lows at the same level.
The only way to avoid this bearish Royal Mail share forecast is for the shares to break above the 200 moving average on the daily chart. This MA currently lies at 235.6p, which is very close to the trendline. This is a very critical level that can also be retested in the coming weeks.
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This post was last modified on Apr 11, 2023, 07:41 BST 07:41