Stock of the day: Rolls-Royce

As the whole world awaits the opening of the US markets to see what Tesla’s price is after the weekend tweet storm, we’ll open the new week with analysis on Rolls-Royce, where we do see a nice bullish opportunity.

It’s not the first time we’re mentioning this instrument. We mentioned it before on August 24^th and back then we were bullish saying:

“Rolls-Royce is doing really great, and in fact, today we received a confirmation of a long-term buy signal. The positive sentiment is coming from the fact that the price escaped from the small pennant formation (blue lines).”

How did that work out? A flawless victory! The price went higher, then made a correction and then moved significantly higher. Rolls-Royce broke the resistance on the 1.32 (blue) and at the end of September, managed to set new long-term highs, slightly below the 1.5. Since then the price has entered another correction, this time a flag (black lines) and this is the flag we’d like to focus on today.

As you can see, the flag managed to test the 1.32 as a support and this test ended with a bullish bounce. After the bounce, the price accelerated, and on Friday broke the upper line of this formation. In theory, that’s a very strong buy signal and that’s why, Rolls-Royce is our stock of the day today.