The Rolls-Royce share price has been under pressure in the past few days as some investors take profit while others react to the company’s full-year earnings. The stock has dropped by more than 9.30% from its highest level last week of 128.70p.
What happened: Rolls-Royce, the giant jet engine manufacturer, has done well in the past few months. Its stock has risen by more than 35% from its lowest level in January this year.
This performance has been because of the ongoing vaccination drive in most important countries like the UK, Australia, and United States. The vaccination rates have also dropped substantially recently. As such, analysts believe that the global aviation industry could recover faster in the near term.
However, the Rolls-Royce share price has weakened mostly because of the vaccination issues in Europe. In the past few days, there has been confusion about the vaccine manufactured by AstraZeneca. Trust in the vaccine globally has fallen because of some recipients who are getting blood clots. While many European countries have restarted the vaccine, the damage is already done.
The AstraZeneca vaccine is notable since it is cheap and is the most affordable to many countries. As such, investors believe that the roll-out could slow down in the next few weeks.
Rolls-Royce share price forecast
Turning to the two-hour chart, we see that the RR share price has been in an upward trend. This has seen it form an ascending channel that is shown in black. And last week, the pair moved slightly below the lower side of the channel and the 25-day exponential moving average (EMA).
While this is a bearish sign, I believe that the price could resume the uptrend as bulls buy the dip. If this happens, the stock could retest the month-to-date high of 128p. However, a drop below 113p, which is the 38.2% retracement level will invalidate this prediction.
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RR stock price chart
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