RBS shares: Why there's hope for the future

It could have become a victim of Brexit, but our chartist sees reason for optimism at this high street lender.

Royal Bank of Scotland (LSE:RBS) 

A truism about the climate here in Scotland is "if you don't like the weather, wait a minute!" As our Royal Bank of Scotland (LSE:RBS) report shows from just a month ago, it appears something similar may be said about the bank's share price...

"If you don't like it, just wait a while!"

Last time we reviewed it from a big picture perspective, we gave upward criteria for 267p, the share price finally choosing to close slightly above this level.

To be honest, it was a surprise as we'd truly expected RBS to become a victim of the Brexit shambles, a situation the price now appears to be avoiding.

Instead, some optimism appears possible for the future (obviously though, politicians remain with ample ammunition to foul things up) and movement now above 275p suggests some near-term travel to a lame 279p is now probable. In the event 279p is bettered, we're looking for a longer term 306p.

Visually, it appears 306p shall prove an excellent place to park the share price as part of a climbing cycle, this suspicion justified by the Brexit date probably being extended and the visual impression of a glass ceiling awaiting around the 3 quid mark.

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For trouble to confirm its presence, the share price would presently require slither below 255p to give real cause for concern. Such a movement allows reversal to proceed down to an initial 248p with secondary, if broken, at 239p and very possible rebound.

But for now, despite this being a retail bank, from Scotland, we're forced to acknowledge some hope is present for the future - at least until the 306p point. Unfortunately, there is the risk of politicians exhibiting their usual Brexit competence and returning the markets to uncertainty.

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.