Rolls-Royce shares remain fragile despite £2.5B UK-backed engine programme

Rolls-Royce shares remain fragile despite £2.5B UK-backed engine programme
Rolls-Royce struggles to reclaim GBX 1,280

​Rolls-Royce is trying to recover after a deep correction as a £2.5B R&D programme supports the long-term growth story. The next test is whether buyers can reclaim GBX 1,280 before the rebound loses momentum.

RR price prediction
24H -0.29%
GBX 1,276.31
48H 0.53%
GBX 1,286.81
7D 1.17%
GBX 1,295.01
1M -18.8%
GBX 1,039.31
3M -28.46%
GBX 915.71
6M -6.59%
GBX 1,195.63
12M 1.16%
GBX 1,294.89
Current price: GBX 1,280 17.00 1.35%
Closed 10/29
Daily range 1252.20 Arrow from to Icon 1290.00
Weekly range 1159.80 Arrow from to Icon 1290.00
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Rolls-Royce has announced plans to work with the UK government on a ten-year research and development programme worth £2.5 billion. The initiative is aimed at developing new aircraft engine technologies and helping the company return to the market for narrow-body aircraft propulsion systems.

Subject to final approval, the programme could support 3,300 jobs by 2029 and contribute as much as £120 billion to the UK economy over the longer term.

Failed recovery near GBX 1,280 raises correction risks

Rolls-Royce shares reached the previously identified GBX 1,250 target and then extended the decline to GBX 1,158 before rebounding towards resistance at GBX 1,280.

Weakness, however, remains evident. The latest rise appears to be driven more by profit-taking on short positions than by a fully established reversal.

If today’s session ends with a doji candle on elevated trading volume, the risk of a move back towards GBX 1,200 would increase.

For the shares to stabilise, they need to hold above GBX 1,200 and attempt to establish themselves above resistance at GBX 1,280. Otherwise, the decline could accelerate again towards GBX 1,100.

November 12 trading update becomes the next major catalyst

The next important event is Rolls-Royce’s trading update on 12 November. According to the company’s official financial calendar, it will publish a Trading Update on that date.

Investors will be watching the performance of Civil Aerospace, demand for engine servicing and the latest results from the Power Systems division.

After the sharp October correction, management commentary could have a significant impact on investor sentiment.

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