Royal Mail Share Price Opens Lower As FTSE Sheds 81 Points
Royal Mail (LON: IDS) share price has been consolidating for the last few weeks after the mail distributor’s share price rallied 20% last month. At press time, the shares were changing hands at 264p, down 1.49% down for the day.
The FTSE 100 opened lower on Friday, down 0.75% till press time. The UK investors reacted to the news of a surprise 0.2% GDP growth in the UK economy in the second quarter. The stronger-than-expected growth data increased the likelihood of further interest rate hikes from the Bank of England (BOE), which could weigh on stock prices.
Royal Mail Strikes Deal With Union Over Pay and Working Conditions
International Distribution Services and the Communication Workers Union (CWU) reached a pay and working conditions deal in April, which would see Royal Mail staff receive a 10% pay rise and a £500 one-off payment. The strikes have since been called off, and the British mailing company is now on track to recover its losses.
In other news, Peel Hunt upgraded International Distributions Services (IDS) from a sell rating to a hold rating. The leading investment bank also increased its Royal Mail share price target to 2.60 pounds sterling from 1.90 pounds. This move suggests that the demand is likely to increase for the postal company’s shares.
Royal Mail Share Price Consolidates At Trend Line
The LON: IDS price chart shows the price consolidating above the diagonal trendline that it broke in July 2023. The trendline shown in the following chart is a very critical diagonal resistance for the share price of Royal Mail.
If the price continues to be supported by the trendline, the next bullish target is the 297p resistance level. However, the bullish Royal Mail share price would be invalidated if the bears break the trendline. This would likely lead to a sell-off that would take the price to the 252p support level.
In the meantime, you are also welcome to follow me on Twitter to keep track of my personal trades and the latest analysis on Royal Mail stock