Throwing a letter in a red British post box from the side
Royal Mail share price opened trading on a positive note on Tuesday morning, trading at 447.6p at 0819 GMT. That was equivalent to a gain of 1.9% over the previous 24 hours. It also signals the continuation of an uptrend for Royal Mail (LSE: RMG), going back to 5th October. The shares have been on the rise in recent weeks, thanks to improved income by the logistics giant.
The company reported a 44.5% increase in parcels volume year-on-year in September, for the five months to August. It is set to announce its earnings and revenue for the past five months on November 18. Based on recent bi-monthly reports, many investors are expecting improved earnings. That is likely to drive up the share price in the near term.
In addition, the coming winter season promises to see RMG earnings rise. Many people had adapted to online shopping during the pandemic lockdown and they are likely to retain their shopping habits during the Christmas shopping season. The Christmas season, coupled with an already bullish sentiment around the company’s earnings align with City Group’s target share price of 659p.
Royal Mail share price is currently riding on strong market momentum, which signals bullishness. The MACD line crossed the signal line one month ago and has remained on top ever since. The RSI has risen from 44 to 59 over the past 5 days.
With the two indicators signaling bullishness, the share price could rise to the first resistance at 449.7p. If the momentum rises further, the price could breach the first resistance to hit 461.1p. However, if the momentum weakens significantly, the price is likely to head down to the first support at 423.7p and possibly to the second one at 403.8p.