This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Sell in May – P7 – Royal Mail
Royal Mail (RMG)
Source: CMC Markets, Date: 02.05.2018
Royal Mail has been a household name in the United Kingdom for centuries, most of the time serving as a public postal service. The company has been publicly listed on the London Stock Exchange and a member of UK 100 since 2014. It briefly left the index in 2017 after a summer share price crash, but has since been promoted back as the shares recovered.
Overall, Royal Mail stock price has seen significant volatility during the May-September season, falling in two out of the four Target Periods since its IPO, with an average share price loss of nearly 5%.
The company’s share price movement has been very bullish in 2018, with year-to-date gains of 30%. Technical indicators suggest that the shares are trading in a long-term rising channel (going as far back as late 2017). Keeping in mind its poor performance over the previous summer periods, can this rising channel be sustained after May? Or will the share price retrace back to its starting point last year?
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Prepared by Michael van Dulken, Head of Research
