Royal Mail share price for January. Time to Book Profits?

The Royal Mail share price has followed a strong uptrend in recent weeks. RMG share is trading at 526p, which is its highest since July 2021. It rose 38% above the October low of last year.

Royal Mail was among the top performing stocks on the FTSE 100 in 2021, as its share price jumped almost 70%. This increase helped the company move to the blue chip index. However, the rally was not smooth as the stock fell 32% between June and October.

The recent rally came after the company announced a £ 400million windfall to shareholders as its business went well. Recent trends at Omicron have caused more and more people to stay in their homes, increasing the demand for mail and parcels.

2022 will be a pivotal year for Royal Mail. The business will need to prove that it can continue to do well even if the demand for packages is expected to decline as Covid-19 cases flatten out or decline.

Royal Mail Share Price Forecast

The daily chart reveals that the RMG share price has been following a strong uptrend over the past few weeks. This price action pushed the action above the 25 and 50 day moving averages as the oscillators moved higher as well. The title is above the Ichimoku cloud.

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Although these are bullish signs, the stock also formed an ascending wedge pattern. In price action analysis, an ascending wedge pattern is usually a bearish sign.

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Therefore, the stock will likely experience a bearish breakout later this month. If that happens, the action could drop below support at 500p. On the other hand, a move above resistance at 535p will invalidate the bearish view.