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Rolls-Royce Share Price: Is the Bullish Trend Over?

The Rolls-Royce share price has been among the most disappointing in 2022, dropping by 41 per cent year-to-date. Today, the strong and aggressive bearish push has resumed following a 14 per cent price gain from the past four trading sessions. 

However, the Rolls-Royce share price drop has come amidst financial data that shows the company improving. Last month, the company completed the sale of Aero at approximately €1.8bn. They indicated the money would go towards reducing its debts, which would provide cover from the worsening interest rates and inflation. The company also posted positive results in its financial report released in August, which showed revenue growth and increased profitability.

Despite these milestones, the company continued to suffer in the markets as a result of a broad market sell-off from investors, who have been on edge throughout the year due to fear that the UK economy was on the verge of a recession.

In the past few weeks, we have also seen a weakening pound starting to impact multinational UK businesses such as Rolls-Royce, hurting its profitability. The demand for civil aviation has also been a major factor that has impacted the industry partly due to the rising cost of living, which is making it harder for people to travel.

Rolls-Royce Share Price Analysis

Rolls-Royce’s share price is down by a percentage point in today’s trading session, resuming a long-term bearish trend. The chart below also shows an aggressive bullish push in the past 4 trading sessions that resulted in the company gaining 14 per cent in the markets and prices pushing past the descending trend line. 

Based on the long-term price action, I expect today’s bearish trend to continue for the next few trading sessions. There is a high likelihood we might see prices hitting the October price low of 65p and possibly trading below it. However, a move above the 78 supply zone will invalidate my bearish analysis.

Rolls-Royce Daily Chart