Rolls-Royce share price surged to a record high this week as the momentum that started in 2020 gained steam. It jumped to a high of 820p on Tuesday, bringing the year-to-date gains to 45%. It has soared by 2,287% from its lowest level in 2020, making it one of the best-performing FTSE 100 companies.
Rolls-Royce share price analysis
The daily chart shows that the Rolls-Royce stock price is gaining momentum, raising the possibility that it will jump to 1,000p, as we predicted here.
The stock has recently crossed the important resistance level at 809p, the highest swing in March this year.
Moving above that level was important as the stock invalidated the risky double-top pattern, whose neckline was at 557p, the lowest swing in April as global stocks crashed following Trump’s Liberation Day speech in which he announced large tariffs,
A double-top is one of the most bearish chart patterns in technical analysis as it shows that bulls are afraid of opening trades above that price.
Therefore, moving above the double-top point is a sign that the Vodafone share price has invalidated the bearish outlook.
Read more: Will the Rolls-Royce share price hit 1,000p after its earnings?
The stock remains above all moving averages, and oscillators are highly bullish. For example, while the Average Directional Index (ADX) has dropped lately, it is showing signs of a reversal.
The Relative Strength Index (RSI) and the MACD indicators continued rising this week, which is a sign that it is gaining momentum.
Therefore, the most likely scenario is where the Rolls-Royce stock price makes a strong bullish breakout and hits the resistance point at 1000p. This target is established by first measuring the distance between the double-top and the neckline, which is about 30%.
After this, we measured the same distance from the double-top level, bringing the price target to 1,065p.
Top catalysts for the Rolls-Royce stock
There are a few key catalysts for the Rolls-Royce share price this year. First, the UK and the US have reached a trade agreement, removing most of the tariffs that the Trump administration put in place. Ending these tariffs would be beneficial since Rolls-Royce has many American clients.
Second, the European Union and the UK progressed in trade relations this week. The two sides agreed to end most of the red tape that have existed in the past.
These agreements are important because, while Rolls-Royce is a British company, it makes most of its money from other countries.
Further, Rolls-Royce business is doing well as demand for planes remains high. For example, Boeing received jet orders worth billions last week during Trump’s trip there. While most of these planes will use General Electric engines, Rolls-Royce will benefit from the sector’s growth.
The most recent results showed that the company’s business is doing well and is on track to hit its guidance. It will make between £2.7 billion and £2.9 billion in operating profit this year and between £2.7 billion and £2.9 billion in cash flow.
It has achieved these numbers ahead of schedule as all segments of its business remains strong. Its civil aviation business is thriving, while the power segment is seeing higher data center demand.
The post Rolls-Royce share price eyes 1,000 as key level turns into support appeared first on Invezz
