Can NatWest really be set for 50% growth?

Lockdown ending could mean good news for the retail bank.

NatWest Group Plc  

The FTSE 100 remains a fully paid up member of The Lethargy Club, and this boredom has encompassed unpleasant numbers of shares. Thankfully, the last week has given early warning for a change in fortunes, and with NatWest (LSE:NWG), perhaps we should see the bank’s share price finally do something interesting.

The core issue with NatWest took place six weeks ago - a triggering movement which thus far has produced nothing. This has been so utterly frustrating that we're still featuring our irritation in this, our third analysis since 7 March 2021.

It seems the rest of the world enjoys stock markets which perform according to logic, while in the UK we've a stock market which models itself after ‘The Sleeping Beauty’. We should maybe console ourselves with the sentiment that 'while nothing good has happened, neither has anything bad'.

Our immediate hope comes from easing of many UK lockdown restrictions from 26 April. Perhaps this, finally, shall provide an excuse for the UK primary market to wake up and dance (or whatever Sleeping Beauty did), as we can calculate some interesting potentials from a big picture perspective, along with a fascinating near-term ambition.

For NatWest’s share price, next above 201p remains with a hope for 212p next, this number fascinating us since March. The bank share price has done nothing to dispel the notion, just joylessly failed to make the final step to our target level.

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What sparks our interest comes should the movement to 212p occur, as this risks a cascade effect. Or at least, it would if the UK market opts to follow the examples being set in France, Germany, the USA, Japan, Australia, etc. Achieving 212p should prove important, triggering a longer-term cycle toward 251p with a longer-term main attraction residing at 307p.

It's not often we can present a scenario for a retail bank which gives the prospect of 50% growth. If it were not for the visuals on the chart below, our inclination would be to distrust the game plan as a pipe dream.

At the time of writing, the share is trading around 194p. The price needs to move below 183p to give reason for panic, allowing weakness to an initial 171p with secondary, if broken, a scary-looking 141p.

Source: Trends and Targets. Past performance is not a guide to future performance

Alistair Strang has led high-profile and 'top secret' software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know 'how it worked' with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.