Here's how RBS's share price could rise
Blue-chip banking shares remain unpopular, but our chartist is intrigued by a potential upside at RBS.
20th February 2020 10:17
by Alistair Strang from Trends and Targets
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Blue-chip banking shares remain unpopular, but our chartist is intrigued by a potential upside at RBS.
Royal Bank of Scotland (LSE:RBS)
At the time of writing, RBS (LSE:RBS) is trading at 206p (that's 20.6p in pre-consolidation terms) and it certainly looks like the market failed to fall for the wizard wheeze of a 10:1 share ploy to make the value of RBS shares sound more respectable.
To be fair, RBS is not the only retail bank with a lousy share price history.
Lloyds (LSE:LLOY), for instance, experienced a low of 34p in 2009 and is now trading at 55.78p. Barclays (LSE:BARC) hit 53p in 2009 and now, 11 years later, is trading at 176p.
In fact, RBS with its low of 9.8p is doing slightly better than Lloyds, presently more than double its price when the sector crashed.
But in comparison to most other shares in the FTSE 100, banking sector shares are about as popular as Laura Ashley (LSE:ALY).
The immediate situation for RBS is a bit fragrant with weakness next below 205p, indicating the potential of travel down to 189p next. If broken, secondary calculates at 171p and we'd expect a rebound from such a level.
The share price will require to close below 171p to justify running for the hills as it will take RBS into a region where "bottom" works out at 114p. We cannot calculate below such a point.
The funny thing, despite the share breaking below our last drop target of 208p, is that we shall be a little curious in the days ahead.
The price only needs to exceed 217p to enter a cycle toward 227p next.
If bettered, secondary is 237p but realistically, if positive news or market conditions are behind a rise, the price could easily accelerate to 252p.
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.
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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