The Rolls-Royce share price is surging today as investors remain optimistic about the overall recovery of the UK economy and the aviation sector. The RR shares are trading at 106.46, which is 10% above the lowest level this month. Other aviation-related stocks are also surging, with IAG share price rising by more than 4.66% while EasyJet stock has risen by almost 5%.
What happened: The Rolls-Royce and other aviation shares are rising after news that the UK was set to reopen its country to vaccinated American travelers. This is a major milestone that will reopen two of the biggest aviation routes in the world. It comes as the two countries boost their vaccination efforts, which is a positive move for the aviation industry. Other countries like New Zealand and Australia have also created a travel bubble.
The Rolls-Royce share price is also rising ahead of the closely-watched earnings by Boeing, the biggest airplane maker in the world. These results will come out on Thursday this week. Analysts will pay close attention to the company’s financial results use the data to predict the performance of Rolls-Royce.
Rolls-Royce share price forecast
The four-hour chart shows that the Rolls-Royce share price has bounced back in the past few weeks. A closer look also shows that the stock has formed what seems like an inverted cup and handle pattern. Indeed, the current bounce can be said to be the formation of the handle part of the pattern.
Therefore, in my view, we cannot rule out another sharp decline below the lower side of the cup at 98.88p. If this happens, the next key level to watch will be the support at 95p. However, a move above 108p will invalidate the bearish case and open the possibility of the stock bouncing above 113p.