Why I think Rolls-Royce shares are a buy

TL;DR

Rolls Royce shares are at an interesting juncture, with a potential major bull trend starting after a corrective three-wave pattern. Support and resistance lines indicate a positive outlook for the shares.

Transcript

hello it's john burford with chart of the week for monday the 28th of march and i'm covering rolls royce today big ftse 100 engineer one of our crown jewels as many people believe but it's fallen on very hard times in recent years in fact this is the um uh the monthly chart it shows the the all-time high up here um close to the four pound region um... Read More

Key Insights

• 😀 Rolls Royce, once considered a crown jewel, has faced significant challenges in recent years, including high debt and competition in the jet engine manufacturing industry.
• 📈 The monthly chart shows a three-wave corrective pattern, indicating a potential major bull trend starting after the bounce off the corona crash low in 2020.
• 🫥 Support and resistance lines have played a crucial role in the price movement of Rolls Royce shares, demonstrating their effectiveness in identifying potential turning points.
• 🫥 The analyst highlights the importance of drawing support and resistance lines, showcasing their ability to determine areas of potential buying and selling.
• 🥹 The outlook for Rolls Royce shares is positive, with expectations of a resumption of the uptrend if the support at the 90p region holds.
• 🫥 The lesson in chart reading using Barclays as an example emphasizes the significance of support and resistance lines and how they can be used to identify potential trading opportunities.
• 🫥 The example with Barclays also highlights the importance of considering the conversion of a resistance line into a support line and vice versa, as it can significantly impact the share price movement.

Questions & Answers

Q: What factors have contributed to Rolls Royce's recent struggles?

Rolls Royce has faced challenges due to its high debt levels and competition in the jet engine manufacturing industry. These factors have impacted the company's financial performance.

Q: What is the significance of the support and resistance lines in the analysis?

Support and resistance lines provide important levels for traders and investors to watch. In this analysis, the extension of certain lines has demonstrated how they have acted as both resistance and support, impacting the price movement of Rolls Royce shares.

Q: What is the outlook for Rolls Royce shares?

The analyst has a positive outlook for Rolls Royce shares, expecting a resumption of the uptrend if the support at the 90p region holds. Furthermore, a break of the upper trend tram line could indicate further bullish momentum.

Q: What can we learn from the lesson in chart reading using Barclays as an example?

The example with Barclays demonstrates the importance of support and resistance lines. When a resistance line is broken and converted into a support line, it suggests that any dips in the share price to that line may find support and provide a low-risk buying opportunity.

Summary & Key Takeaways

• Rolls Royce, a major FTSE 100 engineer, has faced difficult times in recent years due to high debt and competition.

• The monthly chart shows a clear three-wave pattern, suggesting a corrective phase followed by a potential major bull trend.

• Support and resistance lines have played key roles in the price movement, demonstrating their validity and potential for future support and resistance levels.