Rolls-Royce’s multi-year uptrend started more than 10 years ago. For that time prices have climbed up from beneath 1 GBP to nearly 13 GBP per share. On the monthly chart of Rolls-Royce we can see how this rally looks like. It could easily be seen as an unfinished impulsive wave. From what we see, we can assume, that wave (4) is currently developing.
“Do not play against the trend” is something like a motto for every successful trader, but since we are looking at the monthly chart, there may be enough time before the larger trend resumes, so it will be too conservative, if we miss an opportunity. But first we need to see if there is one. In order to do that, we will take a look on the 4-hour chart, where the structure of wave (4) is visible.
And the 4-hour chart shows five waves down for A. The trading opportunity we were looking for should occur as soon as wave B is over. Then we will have the chance to sell some Rolls-Royce’s shares, thus catching wave C down towards probably 9 GBP per share, where wave (4) should end. Wave (5) is expected to lead prices to a new high, maybe above 14.