Rolls-Royce Share Price Analysis After Tough Month

Rolls-Royce’s share price continues to suffer in the markets, with today’s trading session extending the long-term bearish trend that has seen the company dropping by 13 per cent in August. Long-term data also shows the drop in August was a continuation of a long-term bearish trend, with year-to-date data showing a drop of 40 per cent. 

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FTSE100

FTSE100 (6825.1)

In Profit

STOP

SELL

TP1

6840

TP2

6750

One of the main reasons we have seen Rolls-Royce suffer in the markets is due to the unpredictable demand in the aviation industry. For instance, most airlines have cut down on their flight expansion plans following two years of the Coronavirus pandemic that saw most of their services brought to a halt. Rolls-Royce, which majorly depends on selling and servicing aircraft engines, has been hit hard by these decisions, which has seen a huge chunk of its revenue disappear. 

Rolls-Royce Share Price Analysis

Going into September, the company is likely to continue facing similar problems, as most airlines continue to focus on survival rather than expansion. Therefore, there is a high likelihood that the monthly will mirror what we have seen throughout August.

Looking at the daily chart below, we can see today’s Rolls-Royce share price is down by a percentage point. The chart also shows that the downtrend is a continuation of a long-term trend that has persisted throughout the month. Since reaching highs of 91 for the month of August, the company has been in an aggressive push to the downside, which has seen it lose 15 per cent of its value to date. 

Therefore, putting everything together, I expect the current Rolls-Royce share price to drop and trade below the 70p price level in the next few trading sessions. There is a high likelihood that Rolls-Royce’s share price may drop as far as to trade below the 65p price level. My analysis will only be invalidated when prices rise above the 85p price level.

Rolls-Royce Daily Chart