Rolls-Royce Share Price Has Been Shredded. What Next?

The Rolls-Royce share price has not been left behind in the ongoing FTSE 100 stocks sell-off. The RR stock price declined to a low of 113p, which was the lowest it has been since December 21st. It has fallen by about 25% below the highest level in December.

Rolls-Royce, like most companies in the FTSE index, has struggled in the past few days. The decline is mostly because of the rising tensions between Western countries and the United States. As the tensions increase, there is an increasing chance that a war could happen. 

The stock has also declined as investors worried about monetary policy. The Federal Reserve will start its interest rate decision today and then deliver its decision on Wednesday. Analysts expect that the bank will provide more hints about interest rate hikes. 

The Bank of England (BOE) is also expected to continue hiking interest rates when it meets next week. Historically, industrial stocks tend to underperform in a period of tight monetary policy.

The Rolls-Royce share price also declined as the company launched a competition between regions in England and Wales to be the location of its main factory for its small nuclear reactors. The company intends to invest about 200 million pounds for the project. Still, it is unclear how much money the company will make from this project.

Rolls-Royce share price forecast

The daily chart shows that the Rolls-Royce share price formed a double-top pattern at around 150p. It has then started dropping and is about 25% below the double-top level. It has moved slightly below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has dropped.

Therefore, there is a likelihood that the Rolls Royce share price will likely continue falling in the near term. If this happens, the next key support level to watch will be at 100p. On the flip side, a move above the resistance at 130p will invalidate this view.