NatWest: New name, same old problems?
Its fortunes were dire as RBS, so will the new NatWest name trigger an upturn? Our chartist finds out.
27th July 2020 08:49
by Alistair Strang from interactive investor
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Its fortunes were dire as RBS, so will the new NatWest name trigger an upturn? Our chartist finds out.
NatWest Group PLC (LSE:NWG)
When we commented on the pending name change back in February, RBS were trading at 206p and we speculated on a bottom potential at 114p.
At the time, we couldn't calculate below such a foul level but with a new name comes new potentials.
Unfortunately, these potentials stink!
NatWest's (LSE:NWG) share price presently needs to exceed 135.698p or so to better the immediate blue downtrend shown on the chart.
Apparently such a miracle should provide early warning of price recovery toward an initial 168p with secondary, if exceeded, a more encouraging sounding 180p.
We're less than convinced about its prospects, thanks to the big picture against RBS pointing at a "maximum bottom" of 114p.
The implication with the share price spending so much time below 114p since March is obviously one of concern.
In the week since the official name change, NatWest shares have now described 'lower lows' and it's creating the situation where weakness below 105p risks reversal to an initial 94p, matching the banking crash low of 2009 (okay, it was 9.8p but the 10x consolidation hides this fact).
Below 94p now gets seriously frightening as our secondary works out at an ultimate bottom of 50p. We can no longer calculate anything below such a level.
The truly frightening aspect to this scenario is it's not restricted to NatWest. A glance at the banking sector index, the famous NMX8350, also suggests some further trauma is in store for the UK retail banks.
Presently, the sector index is at 2,207 points and we'd previously calculated 2,460 points as the ideal bounce level. Obviously, it hasn't bounced and is spending its time below "bottom".
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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