The Rolls-Royce share price had a turbulent 2020. With bumper car sales and the holiday season approaching, is a comeback on the cards?
It’s fair to say that 2020 was a tough year for the Roll-Royce share price. At its peak in February, the stock was trading at 244.00 pence per share. At its current 106.74p valuation, it is down over 56% since.
The biggest contributor to the company’s revenue comes from its Aerospace division. With the Skies almost empty for the last 15 months, it comes as no surprise that the share price has struggled.
In April this year, the firm revealed that its Automotive division had the best quarter in its 116-year history. This and the upcoming easing of lockdowns should provide the Rolls-Royce share price with a welcome boost as holidaymakers prepare for much-needed summer vacations.
A recently announced deal with logistic giant DHL should provide additional headwinds. The deal will see Rolls-Royce provide serving for DHLs Airbus 3380 planes.
In March, CEO Warren East predicted the company would improve upon 2020’s disastrous performance, saying:
“2020 certainly marks the low point. We think that the worst is now well behind us.”
Investors will be hoping he is right.
Rolls-Royce Technical Outlook
On the daily chart, we can see that the Rolls-Royce share price has rebounded from an ascending trend line at 100.40. This trend has been in place since the October 2020 low of 35.68p.
The bounce from the trend has now seen the price clear the important 100-Day Moving average at 106.72p. This should now take the Rolls-Royce share price to the next resistance level, the 50–Day MA at 109.25p.
On clearance of the two averages, the price is open to an extension to 126.00p. A descending trend line in place from the October 2020 high of 146.60 should provide resistance.
Bulls may look to enter positions above the 50-Day Moving average and target the resistance at 126.00p.
Stops should be placed below 100.00p, a break of which, could trigger a decline to the 200-Day MA at 94.82p.