Rolls-Royce under pressure

Rolls-Royce, the engineering group, announced that 1H underlying net loss widened to 3.33 billion pounds from 28 million pounds in the prior-year period

Downtrend 3

Rolls-Royce, the engineering group, announced that 1H underlying net loss widened to 3.33 billion pounds from 28 million pounds in the prior-year period and underlying operating loss amounted to 1.67 billion pounds, citing 1.2 billion pounds one-off charges in Civil Aerospace related to COVID-19 and compared with an underlying operating profit of 203 million pounds a year ago. Also, revenue dropped 24.4% on year to 5.56 billion pounds. The company added: "While our actions have helped to secure the Group's immediate future, we recognise the material uncertainties resulting from COVID-19 and the need to rebuild our balance sheet for the longer term. We have identified a number of potential disposals that are expected to generate proceeds of more than £2bn, including ITP Aero and a number of other assets."


From a technical point of view, the stock price remains in a downtrend, capped by the declining 20WMA since May 2019. The weekly Relative Strength Index (RSI, 14) remains below a former rising trend line and below 50%. As long as 306p is resistance, the risk of a break below Aug 3rd low at 212.1p will remain high. This would open a path to see 130p. Alternatively, a push above 306p (breakout confirmation of the 20WMA) would call for a recovery towards 354p and 427p. 

Source: GAIN Capital, TradingView

Build your confidence risk free

More from Equities

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.