NatWest: can its shares break free from the doldrums?
Retails bank shares have been static. Our chartist looks for potential upsides.
2nd November 2020 09:40
by Alistair Strang from Trends and Targets
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Retails bank shares have been static. Our chartist looks for potential upsides.
NatWest (LSE:NWG)
Since March, NatWest's (LSE:NWG) share price has been about as interesting as this year’s Top Gear series on BBC.
Doubtless thanks to Covid-19, three generally entertaining presenters appeared to lose their way as the series continued, their short season completing with a pretty predictable episode.
Perhaps they should not have even bothered, as the effort only served to make the franchise less interesting.
Similarly, retail bank shares have spent the last six months giving the impression of ‘nothing happening here, move along’. While we hope for some recovery the prospect feels increasingly unlikely.
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NatWest’s share price, despite fulfilling our gain scenario to 124p in our previous report, has a price movement chart which shows a considerable lack of confidence since the pandemic took hold.
The immediate problem is fairly straightforward, thanks to the visuals implying some sort of glass ceiling awaits, almost regardless of any near-term gains.
At present, above 125p now suggests the possibility of price recovery to an initial 134p. If exceeded, our secondary ambition calculates at 140.5p. This is where an issue awaits.
Since March, NatWest’s share price has made two attempts at the 140 level and we shall not be aghast if any future attempt falters at such a price.
Only with closure above 140.5p shall it feel like an attempt to break free from the doldrums, launching the bank’s share price into a region where a longer-term 191p is allegedly believable!
If trouble is planned, weakness next below 101p shall be controversial, taking the share into a zone where reversal to 90p becomes possible, with secondary, if broken, at a bottom of 60p.
Early warning of trauma will be reversals below red, presently around 113p.
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.
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