Sunak’s Speech Smokes the Stock, the BATS Stock Price Declined

British American Tobacco plc facilitates the manufacture and distribution of tobacco products. British American Tobacco’s (LON: BATS) share price has declined by 31% in the last 5 years. Now, the stock is down not only for the long-term holders but also for the short and medium-term investors. It is down 23.4% in a year.

The 50-day moving average price is £2602 while the 150-day moving average price is £2723. The price-to-earnings ratio of the BATS stock is 6.38 and the Basic earnings per share is £3.88. Moreover, the return on equity for the financial year is 11.9%.

Rishi Sunak and the Price Action

The BATS stock price saw a decline two days ago after a statement by the prime minister, Rishi Sunak during the Conservative party conference in Manchester, London. Rishi Sunak proposed a new policy to raise the legal age for buying cigarettes. Under this policy teens under a certain age group would never be able to legally purchase cigarettes.

Sunak also stated that this could help the younger generation to grow up smoke-free. He emphasized the importance of preventing teenagers from taking up smoking in the first place, stating that it is essential to do the right thing for our kids.

Technical Analysis and Prediction of BATS Stock Price

At the press time, the BATS stock price is at the level of £2491. It is just above its immediate support level of £2472. However, the support has been tested twice before. The present momentum of bulls has weakened. Therefore, a deviation below this support level is possible.

There is still hope for the BATS stock price as it has a strong demand zone available right below the current support level. This demand zone was formed in November 2020. It indicates that the stock has a chance to recover from its deep downtrend.

The prediction of the BATS stock price is bullish but only after the deviation is confirmed. As the bulls have been constantly absorbing the selling pressure since May, a trend reversal will likely be seen very soon.

Conclusion

British American Tobacco’s (LON: BATS) share price has declined by 31% in the last 5 years. Recently in a speech, the prime minister, Rishi Sunak stated the measures he is likely to take regarding the legal age of buying cigarettes. That caused a fall in the stock price. Currently, the stock is near its resistance and a trend reversal is predicted after a deviation for the short term

Technical Levels

Support: £2472 and £2379

Resistance: £2646 and £2737

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.