Royal Mail (LON: IDS) share price suffered a 9.5% correction after facing rejection from the key trendline that I mentioned in my last analysis. The shares for the British mailing company are changing hands at 239.7p, 0.87% down for the day.
The FTSE100, which contains 100 British companies listed on the London Stock Exchange, showed signs of recovery on Wendesday. The index sat 1% above its previous close at 7328 points. Despite this rebound in FTSE, the bearish sentiment surrounding Royal Mail shares did not diminish.
IDS Lists Reasons For Low Performance in Q1
On Sunday, International Distributions Services shared a report that listed the lack of staff in their post offices and the lack of available vacancies as the main reasons that affected their operations in Q1. IDS also mentioned areas most affected by postal delays this weekend and promised to improve services in those areas.
In other news, Peel Hunt expects Royal Mail share price to benefit from the improved performance made by GLS’s rivals. GLS is another company owned by IDS, which also saw good quarter results with a lot of growth potential. This news is likely to put bullish pressure on IDS share price.
Royal Mail Share Price Forecast
The price chart for LON: IDS shows the price has hit my bearish price target of 252p that I predicted weeks ago. The price broke through the key 252p level and is trading 4.5% below it.
If the bearish momentum keeps increasing, I expect a retest of the 200 MA at around 230p. If the bears remain in control of the price, a further 13% correction to the next key psychological level of 201p would also be on the cards. Bulls need to reclaim the 252p and flip it into a support level to show strength.
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