Signs that RBS shares are becoming interesting
Our chartist examines the levels where future tumultuous drops could prove to be difficult.
4th July 2019 09:11
by Alistair Strang from Trends and Targets
Our chartist examines the levels where future tumultuous drops could prove to be difficult.
RBS (LSE:RBS)
We'd tried to skip RBS (LSE:RBS) in our retail bank analysis recently. Essentially, it proved difficult to whip up enthusiasm for a month's price moves which frankly make the UK PM contest seem exciting and vibrant.
However, there are slight signs things with RBS are about to become slightly interesting.
Movements now above 225p indicate the prospect of some recovery in the near future with 234p calculating as an immediate prospect. If this ambition appears, there's a fairly firm suggestion we've spent the last year scanning movements against the wrong trend!
What alarmed us this week was how the share price opened on Monday. The market opted to gap the price up, suggesting "they" were skipping over a trend. If this proves the case and 234p makes an appearance anytime soon, our secondary, if bettered, calculates at 253p.
We have considerable doubts regarding this and the lower chart gives a fairly straightforward visual excuse. It appears the market is asking us to believe RBS share price was jumped across a downtrend which started in 2008!
We're just a little sceptical about this, if only due to RBS previously triggering what seemed a solid movement down to 202p.
In theory, our 202p target level is now void but on this occasion, our inclination is to distrust software and instead fear the worst. After all, we've identified a market strategy when a share price is magically gapped up, then gapped down a few days later. This tends to indicate a price is about to be roasted.
For RBS, this will mean weakness below 212p should propel the share down to 202p initially with secondary, if broken, at 177p.
In fact, it could easily tumble to 149p eventually with the correct blend of toxic news and market conditions polluted by UK politics.
For now, we shall watch carefully for the price actually closing above 234p as this should make future tumultuous drops difficult.
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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