Rolls Royce Share Price Loses Strength As FTSE Makes Fresh Monthly Lows

Summary:
• Rolls Royce Share Price Forecast: LON: RR is losing momentum after failing to gain strength above 0.5 Fib level. It needs to break above 205p.

Rolls Royce (LON: RR) share price has seemingly lost its bullish momentum as the shares are down 3.7% from the monthly high of 209p. The shares are now trading at 201.4p. This comes after the jet engine manufacturer reported better-than-expected earnings that led to the price surging 15% at the start of August.

The diminishing bullish pressure in Rolls Royce share price can be attributed to the sliding FTSE100. The index slid 3.45% in this week alone and now stands at 7,328 points. A reason for the negative sentiment is the latest release of inflation data, as investors expect no reduction in interest rates anytime soon.

Rolls Royce Receives Upgrade From Big Banks

Big players in the investment banking sector, like Barclays and JPM, took notice of the British jet engine manufacturer as it reported stellar earnings. Barclays has increased its price target for Rolls Royce substantially, from £1.56 to £2.39. Financial giant JPMorgan not only increased the share price target from £0.9 to £2.35 but also increased its rating to neutral.

The credit rating agency Moody has also revised the Rolls Royce rating, increasing the corporate family rating to Ba2 from Ba3. The agency listed the positive earnings report and recovery in demand for air travel as the main reasons for the upgrade in the firm’s credit rating.

Rolls Royce Share Price Gains Bullish Outlook

In my previous forecast for LON: RR, I accurately predicted the correction of the share price from 208p, as the shares are currently down 2% from that level. The price chart also shows the bulls are resting after they pushed the price to new monthly highs. Actually, the price failed to gain strength above the 205 pence level, which is the 0.5 fib retracement zone.

If the bulls gain strength 205p level, Rolls Royce share price forecast could flip very bullish. In this case, the next bullish target could be the 0.618 fib level which lies close to 250p. However, if FTSE100 fails to show any strength, a retest of the 175p support level is also likely.

In the meantime, I’ll keep sharing updated Rolls Royce stock forecasts and my personal trades on my Twitter, where you are welcome to follow me.