NatWest: warning signs to look out for
NatWest is not a happy share at present. Our chartist analyses where things could go for the retail bank
21st September 2020 09:27
by Alistair Strang from Trends and Targets
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NatWest is not a happy share at present. Our chartist analyses where things could go for the retail bank.
NatWest PLC (LSE:NWG)
As mentioned on Friday, we think the UK banking sector is almost at a logical bottom, the point where some sort of rebound can be hoped.
In the case of NatWest (LSE:NWG), this now translates to a share price drop potential around the 94p level, but only if we apply share price movements since the March Covid-19 drop.
If we opt to zoom out and search for further reasons to be miserable, our secondary drop potential stinks.
The immediate situation is fairly straightforward.
Weakness next below 96.6p risks promoting reversal down to 94p next, but unfortunately, thanks to a couple of price manipulation gaps in the last few months, this number could extend down to 90p.
We'd hope for a rebound in the 90s, if only due to the historical low of RBS’s share price back in 2009 when it bottomed at 9.8p during the last stock market crash.
Of course, 9.8p translates as 98p thanks to the share price experiencing 10:1 consolidation.
However, it's worth remembering that if we adjust Friday closing price of 96.88p, the share is already below its prior all-time low as it is really at 9.688p.
Our calculations allow a secondary, should the 90p level break, at 70p and a price level where we'd hope for a real bounce.
In fact, ideally we'd hope for a rebound to occur somewhere between the two drop levels as this will imply some residual strength in the share price. NatWest is not a happy share at present.
For any miracles to occur, Natwest needs to trade above 101p to ideally enter a cycle to an initial 110p. If exceeded, our secondary calculates at 121p.
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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