Earlier this month RL broke down below recent support and beyond the consolidation zone where price has been trading since mid-2013. The downtrend began to develop a few days after the earnings announcement on 4th February.
Throughout the majority of February price has been trading between the lows of 2014 and 2012 - with 2012 acting as support and 2014 as resistance. On Friday price broke below the 2012 pivot, with a very bearish bar, and the weakness looks likely to continue.
With the next major support zone at around $105 there is some room for price to continue to fall. There may be a retest of the 2012 pivot and, on the weekly chart, the 50ma is still above the 200ma (we would ideally like to see the weekly 50ma cross below the 200ma to give us an additional reason to short this stock).
RL is trading against the markets in general and, if entering this trade, it would be a longer-term sell (to give the bear trend time to develop). With over $25 to the next support level this could be a good opportunity for those who are happy to short stocks at this time.
Throughout the majority of February price has been trading between the lows of 2014 and 2012 - with 2012 acting as support and 2014 as resistance. On Friday price broke below the 2012 pivot, with a very bearish bar, and the weakness looks likely to continue.
With the next major support zone at around $105 there is some room for price to continue to fall. There may be a retest of the 2012 pivot and, on the weekly chart, the 50ma is still above the 200ma (we would ideally like to see the weekly 50ma cross below the 200ma to give us an additional reason to short this stock).
RL is trading against the markets in general and, if entering this trade, it would be a longer-term sell (to give the bear trend time to develop). With over $25 to the next support level this could be a good opportunity for those who are happy to short stocks at this time.