The Rolls-Royce share price dropped by more than 2% after the company published its trading update. The stock is trading at 102.45p, which is 7% below the highest level this week.
Rolls-Royce news: Rolls-Royce Holdings has been among the worst-affected companies by the pandemic. This is simply because many of its customers had to idle their planes. This is continuing this year since many countries are still closing their borders. RR was vulnerable because its engines are mostly used by planes travelling across different countries.
In a statement today, the company said that business has been in line with expectations. In the first four months of the year, its engine’s flying hours was around 40% of its 2019 levels. This is important since the company makes most of its money from long-term contracts by the airlines it sells its engines to. It also said that its power systems division was performing well amid a challenging environment. Its defence business is doing well, helped by the substantial backlog.
For the full year of 2020, the company had a revenue of more than 11.8 billion pounds and an operating loss of 2 billion pounds.
Rolls-Royce share price forecast
The four-hour chart shows that the RR share price has been under pressure lately. The stock has found a lot of support at the 100p level. Also, it has moved below the 25-day and 50-day moving averag. The shares seem to be forming a descending triangle pattern, which is usually a bearish sign.
Therefore, the outlook for the stock is currently bearish. This prediction will be confirmed if it manages to move below the support at 100p. If this happens, it will open the possibility of another decline to 95p. However, a move above 106p will invalidate this trend.