Rolls Royce Holdings (RR.) EW-Analysis

Rolls-Royce in Front of a Major Correction

Rolls-Royce Holdings has shown a significant performance over time and displays a very homogeneous impulsive structure.

Since 2003, Rolls-Royce has developed a first bullish impulsive movement and, in 2014, completed its first impulsive fractal with green wave 1 at $444.10. From there, the market corrected this move with a bearish green wave 2, thereby completing the initial 1–2 structure. This formation establishes a strong foundation for a long-term bull market in this stock.

Following the completion of green wave 2, Rolls-Royce expanded into a new impulsive sequence within the dark blue cycle. This bullish momentum accelerated rapidly, pushing the market to new all-time highs above the previous peak of $444.10 from green wave 1.

However, the dark blue cycle has now come to an end and unfolds as light blue wave 1, forming the first bullish fractal of the light blue cycle, with a new all-time high at $1,420.

At this stage, we expect that the market has reached a temporary top and is now initiating a corrective phase into bearish light blue wave 2, which will complete the first impulse of the light blue cycle.

From a long-term perspective, once this corrective phase is завершed, we anticipate that Rolls-Royce will expand further into light blue waves 3 and 4, followed by its final leg, wave 5. This entire structure would then unfold as a larger-degree green wave 3.

For this anticipated green wave 3, we have defined a Fibonacci-based target zone in which the market is likely to expand. The projected levels are:

• 161.8% at $2,295
• 200% at $2,830
• 261.8% at $3,694

This target zone represents a standard expectation for wave 3 expansion. However, it should be viewed as a guideline rather than a fixed outcome, as the market may extend beyond or fall short of these levels depending on future structural developments.

Nevertheless, it remains highly probable that the stock could reach these price targets over the coming years.

At present, Rolls-Royce appears to have completed light blue wave 1 and has now entered its corrective phase into light blue wave 2.

For the termination of light blue wave 2, we have set a Fibonacci retracement zone.

This zone is defined at:

• 61.8% at $564.60
• 78.6% at $331.50
• 88.7% at $191.40

Within this zone, we expect the current correction to come to an end, followed by a return of bullish momentum in line with our long-term outlook for green wave 3.

Based on this expectation, this zone represents a prime opportunity to buy or accumulate the stock.

If any structural changes occur, or once Rolls-Royce reaches our Fibonacci retracement zone, we will update you immediately.

Kind regards,
Monalytics

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