NatWest: can the bank enjoy an Easter revival?

Its share price has been improving, and there's potential for more here.

NatWest Group

It seems apt to cover NatWest (LSE:NWG) in our final analysis before Easter. After all, the whole festival is dedicated to the concept of rising from the dead, with the result that a hard look at a UK retail bank makes some sense.

It's certainly the case, from our previous report, that the process is proving exquisitely slow despite the potential of resurrection being triggered!

When we last covered the bank, we were fairly comfortable a nudge beyond 194p should produce share price recovery to 211p. Earlier this month on 19 March the magical triggering move happened, and in the intervening period the highest achievement for NatWest has been a pretty lame 199p. Does this mean our previous scenario was wrong and should now be ignored?

We don't think so, instead suspecting the lethargy infecting NatWest is another symptom of something greater, which encompasses the FTSE itself.

During late February and March, we've seen numerous shares move upward, in the process triggering levels which should produce entry to useful gain cycles.

Across Europe, similar trigger levels being exceeded have all tended produce significant price movements, just not for shares in the UK market. Those who 'play' the FTSE will be painfully aware of the index's malaise for the last few months. Unfortunately, one of our trite sayings, "if it ain't going up, it's going down!" looks apt.

Currently, the French market (CAC40) is playing what seems like a similar game to the FTSE, but there is an important difference.

The CAC40 is hesitating while the index challenges the pre-Covid market high, whereas the FTSE is catatonic nearly 1,000 points below such a level.

It's not a pretty sight, but we're mildly optimistic for the future.

Should the FTSE stagger above 6,900 points, many shares which are presently lethargic have the potential to burst into life as they emerge from their caves.

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The scenario for NatWest can now be moderated to read; above 199p now calculates as capable of 215p with secondary, if exceeded, calculating at 256p. These numbers represent a very modest change to our previous thoughts, as our price targets are calculated according to price movements.

It's complicated, but expectations can evolve. While it's still the case some hesitation is suspected around the 250p level (if only due to the historical visuals), there is a longer-term facet in this scenario which presents a distant 365p as an attraction for the infinitely patient, or at least those patient enough to stay alive that long!

NatWest needs to devalue below 165p to cause trouble, allowing weakness down to 142p.

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.