Rolls-Royce continues to struggle ahead of August earnings
Despite the global rally in stocks and hopes of a rebounding world economy, Rolls-Royce shares have been firmly left out in the cold.
Investors clearly aren’t expecting much from Rolls-Royce when it reports results in early August. It looks like the company still has a mountain to climb, with a goal to turn free cashflow positive by the end of the year looking more unlikely by the day.
Given this scepticism, it is hardly surprising that the shares have struggled. Two rallies towards 130p, one reaching 134p, proved to be the limit of gains for the stock, and despite signs of a gathering global economic recovery there seems to have been little change in sentiment, and certainly none in terms of the trend.
The price remains below the 200-day simple moving average (SMA) at 113p, and while this is flattening out it continues to provide a more bearish view, and recent losses below 95p put 87p and then 65p into view as potential targets to the downside.
Dip buying would appear to be a rather futile exercise at present, since the stock has yet to create a sequence of higher highs and higher lows.
At best, this is one where the outlook remains neutral, with some buying pressure near previously-mentioned support, but no real upward impulse for the time being.
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