UBS agrees, Rolls-Royce share price could hit 200p – technical analysis

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on Apr 25, 2023
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  • The Rolls-Royce Holdings stock has been in a tight range recently.
  • The shares have formed a cup and handle pattern on the daily chart.
  • Analysts at UBS expects that the shares will jump to 200p.

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Rolls-Royce Holdings (LON: RR) share price has moved sideways in the past few weeks as the recent rally takes a breather. RR has been one of the best-performing FTSE 100 constituents this year after jumping by more than 140% from the lowest level in October last year. In this article, we will look at what technicals are saying about the shares.

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Rolls-Royce share price analysis

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On the daily chart, we see that the RR stock price has been in a strong bullish trend in the past few months. As a result, the company has moved above the 25-day and 50-day exponential moving averages (EMA). In trend-following, this is usually a bullish sign since it shows that bulls are in control.

At the same time, the shares have formed a cup and handle pattern, which is also a bullish sign. The recent consolidation is part of the formation of the handle section. In price action analysis, this pattern is a positive sign. The stock is also above the Ichimoku cloud indicator. It is also slightly above the upper side of the cup at 150.35p. 

Therefore, there is a likelihood that the stock will have a bullish breakout in the coming months. If this happens, as I wrote here, there is a possibility that the shares will jump to 180p followed by 200p.

A likely catalyst for this bullish trend will be the rising flying hours, which have an impact on the company’s revenue. In a statement, analysts at UBS said that they expect that flying hours jumped by more than 2.8 million in the first quarter. They also expect that hours will rise to over 13 million this year. In their report, the analysts said that they expect the Rolls Royce share price to hit 200p this year.

Rolls-Royce share price

Rolls Royce share price analysis

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Turning to the weekly chart, the shares have been in a bullish trend. It has moved close to the 38.2% Fibonacci Retracement level. It has also jumped above the 25-week and 50-week moving averages. The shares have formed a bullish crossover pattern while the Relative Strength Index (RSI) have continued rising. 

The stock has also formed a cup and handle even on the weekly chart. Therefore, based on this pattern, the shares will likely rise to the 38.2% retracement point at 167p followed by 207.20, the 50% retracement point. The latter price is about 35% above the current level.

Rolls-Royce stock price

RR chart by TradingView

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FTSE 100 Index Rolls-Royce Holdings UK Manufacturing Stock Market