Royal Mail share price is on track to meet my price target of 296p. In my previous LON: IDS analysis, I predicted a move toward this price level in case of a breakout above the 258p resistance level. This breakout occurred on December 12, and since then, the price has been in an uptrend.
On Wednesday, shares of International Distribution Services fell by 1.04% despite an overall positive sentiment in the UK stock market. At press time, the shares were changing hands at 275.7p just a few minutes before the market close.
The rally in Royal Mails shares started with an upgrade from Bank of America. The American financial giant raised the price target for the British postal service from 275p to 335p on 12 December. Since then, the price has been up more than 15%, and there is more upside on the cards.
Western equities are experiencing strong tailwinds due to the expectations of early rate cuts and slowing down inflation. Although the Bank of England has maintained a hawkish stance so far, it may change once the US Federal Reserve pivots in the first quarter of 2024.
The chart above shows a clear breakout from the symmetrical wedge/triangle pattern. At the same time, the price has also gained strength above 258p, which makes the Royal Mail share price forecast very bullish. While this breakout still needs to be confirmed by another retest of the 258p level, a move toward 296p appears to be just a matter of time.