Jump to content

Royal Mail falters ahead of trading statement


MongiIG

714 views

Royal Mail has drifted down since June, as enthusiasm for the shares wanes.

BG_royal_mail_van.jpgSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Wednesday 22 September 2021. IG

Royal Mail (RM) shares are a classic case of markets asking the question, ‘so what now’?

If there was a metaphor for how expectations regarding the economic rebound have gone from manic optimism to ingrained pessimism, then Royal Mail shares would fit the bill perfectly. Having risen for a year, and quadrupling in that time, the wheels have really come off, as the shares drift down below 500p.

Still, those who bought last year are still sitting pretty, but it is clear that the market and RM’s shareholders are not very clear on what comes next.

At just under eight times earnings it is still not expensive, it just lacks a catalyst to spark another rally, and from a momentum perspective it seems that RM has yet to conjure up a real story to inspire further inflows.

The drift down towards the 200-day simple moving average (SMA) - currently 477p - continues, with little sign of upward momentum. So far there has yet to be much of an upward move, although support at 470p continues to hold.

A move above 510p would likely provide evidence of returning bullish momentum.

RMG_210921.pngSource: ProRealTime

0 Comments


Recommended Comments

There are no comments to display.

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Blog Statistics

    • Total Blogs
      3
    • Total Entries
      1,935
  • Latest Forum Topics

  • Our picks

    • Swiss Franc Firming Against US Dollar and Euro. Will Momentum Take CHF Higher?
      EUR/CHF made a 7.5-year low at the end of last month at 0.9699, moving below the previous low of 0.9804.

      Since breaking lower, the price has not managed to reclaim 0.9804 and it may continue to offer resistance. The 21-day Simple Moving Averages (SMA)is currently at that level, potentially adding resistance.

      Further up, the recent peak of 0.9957 might offer resistance ahead of the break point at 0.9973.

      In the last session, the price has crossed below the 10-day SMA and remains below the 21-, 55-, 100- and 200-day SMAs.

      A bearish triple moving average (TMA) formation requires the price to be below the short term SMA, the latter to be below the medium term SMA and the medium term SMA to be below the long term SMA. All SMAs also need to have a negative gradient.

      Looking at EUR/CHF, the criteria for a bearish TMA has been met and may indicate that bearish momentum could evolve further.

      Support might be at the recent low of 0.9699 or further down at the 161.8% Fibonacci Extension of 0.9638.

       

      Chart created in TradingView 

      USD/CHF TECHNICAL ANALYSIS

      USD/CHF has bounced off low made at the start of this month at 0.9470 to trade in a wide range of 0.9545 – 0.9650. These levels might provide support and resistance respectively.

      While the price is below all short-, medium- and long-term Simple Moving Averages (SMA), they have positive and negative gradients. This may suggest a lack of conviction for directional momentum that might see further range trading.

      Re-iterating this possibility is the price criss-crossing the 10-day SMA. Recent history has shown that when the price crosses the 10-day SMA, momentum in that direction continues. That is not the case over the last week.

      The recent low of 0.9470 may provide support ahead of the break point at 0.9460. On the topside, resistance might be at the break point of 0.9710 or the July peak of 0.9886.

       Chart created in TradingView

      Daniel McCarthy, Strategist Daily FX

      Source: Daily FX
      • 0 replies
    • Post in FTSE 📈 to drop soon
      Check out phillo's analysis on the FTSE100. Are you tracking any technical analysis for the FTSE you want to share? If so join the forum.
        • Like
    • Rolls-Royce share price: half-year results
      Rolls-Royce shares (LON: RR) sunk by 10% to 83p on Friday after half-year results spooked investors over long-running problems with supply chain issues and inflation.
      • 0 replies
×
×
  • Create New...