Unilever shares test key support after post-earnings rally
Unilever shares have entered a short-term correction following a strong post-earnings rally and an unsuccessful attempt to establish a sustained position above GBX 5,000. Holding the 200-day SMA near GBX 4,740 would preserve the likelihood of another test of this level.
The current price action remains a continuation of the market’s reaction to Unilever’s first-half results on July 28, followed by profit-taking. The company’s fundamental performance remains strong.
Unilever’s underlying sales increased by 4.8% in the first half, while growth accelerated to 5.8% in the second quarter. Volume growth reached 5.5%, with the company describing the quarter as its strongest for volumes in more than a decade.
Following a strong first half, management raised its outlook and now expects full-year underlying sales growth of 4–6%, with volume growth of approximately 3%.
Holding the 200-day SMA keeps GBX 5,000 in focus
The scenario outlined previously has fully materialized: Unilever shares tested the psychological GBX 5,000 level but failed to hold above it, triggering a period of short-term profit-taking.RSI (14) was in overbought territory. This became one of the technical factors behind the current correction following the strong upward move.
The 200-day moving average near GBX 4,740 is now the key support level. Holding this area could help generate a fresh bullish impulse and lead to another test of GBX 5,000.
However, the risk of a deeper correction remains. If the 200-day SMA fails to support the price, the next downside target would be around GBX 4,664.
The medium-term target for ULVR shares stands at GBX 5,135.
Unilever shares balance strong growth against margin pressure
Unilever’s medium-term fundamental outlook is supported by strong volume growth, upgraded full-year guidance, and resilient performance across its key brands. Strong momentum in emerging markets, which account for 60% of group turnover, remains an additional advantage.
However, in the second half, the company will need to balance higher pricing with maintaining consumer demand. Unilever expects pricing growth to accelerate due to raw-material inflation, while gross margin already faced pressure from higher costs during the first half.
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