The Rolls-Royce share price rose by more than 1% on Monday as investors attempted to buy the recent dip. The RR stock price is trading at 110p, which is still about 8.45% below the highest level this month.
Rolls-Royce Holdings faces key challenges
Rolls-Royce, the giant jet engine manufacturer, has struggled in September as investors remain concerned about the future of the aviation industry.
The challenges increased last week as more American airlines lowered their forward guidance. Recently, companies like United, American, Delta, and Southwest have all slashed their guidance, citing flights cancellations and low bookings.
At the same time, Rolls-Royce faces the challenge of the higher cost of doing business. For example, the price of aluminium rose to $3,000 per ton in London today. This was the highest it has been in 13 years. The increase is mostly because of the recent coup in Guinea, which is the leading supplier of Bauxite.
Other metals used in the manufacture of jet engines like steel have also seen their prices surge recently. At the same time, the company will need to contend with higher wages, which will affect its growth trajectory.
Rolls-Royce share price forecast
The daily chart shows that the RR share price has lost momentum in the past few days. The stock has already dropped by about 11% from its highest level this month. As a result, it is along the 50-day and 25-day moving averages. It remains between the support and resistance levels at 87p and 128p. Also, it has formed a small head and shoulders pattern.
Therefore, the stock will likely remain under pressure as bears target the next key support at 100p. This view will be invalidated if the price moves above the key resistance at 120.54p.
