Interactive Investor

Could NatWest's results kickstart a true recovery

Investors will he hoping the high street lender has some good news for them when it publishes results on Friday. Independent analyst Alistair Strang reveals what his charts say.

12th February 2024 07:47

Alistair Strang from Trends and Targets

NatWest Group (LSE:NWG) is due to release its annual results this week, so it’s doubtless worth taking yet another Big Picture review of the share price potentials, especially as the share price has managed to close above our crucial 225p on a couple of occasions.

With surprise generosity, the market opted to confirm our arithmetic by gapping the share value down from 225p on 1 February. We immediate questioned whether this was a strategy to stop it moving too fast.

According to the media, groaning under the usual weight of leaks prior to the banks earnings report, NatWest is expected to reveal its most profitable year since it was effectively nationalised thanks to the financial crash. Additionally, they are due to pay staff bonus’s at slightly less than 2023’s value and, better still, there’s the expectation the UK government shall dump their remaining shares in the bank in a mass market share sale, perhaps are early as June of this year.

This perhaps has the potential of kick starting some true recovery for the share price as it isn’t the case the share count is being diluted. Instead, the leaden hand of the UK 

Hopefully this, along with a decent set of results, shall lay the groundwork for NatWest to actually do something useful.

It now appears to be the case where above 229.1p should prove capable of triggering a lift to an initial 240p, with our longer term secondary, if bettered, calculating at a future 290p. The idea of a visit to 290p isn’t very exciting as it doesn’t even challenge the highs of the false dawn back in 2023.

However, such an ambition would take the share price above its pre-pandemic high, and we strongly suspect this will provide a firm signal for share motivation in coming months, especially as our third level of ambition works out at a future 395p, a hope which doesn’t look entirely ridiculous.

Now we’ve gotten all the reasons for optimism out of the way, there remains a tiny little detail crying out for consideration. NatWest's share price remains trading below Red on the chart, now needing above 230p to suggest it has all been a mistake and things should get better.

While an amazing degree of respect is being paid to the Blue downtrend which dates back to 2007, we dare not conclude things are about to get better. Below 203p now calculates with the risk of reversal to an initial 193p with secondary, if broken, an eventual 182p and hopefully a bounce.

Our suspicion is we’re about to see NatWest become useful.

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. 

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