Thoughts on NatWest, Bitcoin and Wall Street

Our chartist analyses prospects for the UK bank and evaluates the cryptocurrency's relentless rise.

Bitcoin, Wall St and NatWest

The first trading day of the year managed to take the nonsensical to new levels. The FTSE 100 was up by around 1.7%. Meanwhile, the various US markets were down by around 1.5% and Bitcoin took a stupid pill.

The cryptocurrency has been experiencing remorseless rises for the last few weeks, quite literally doubling in value since the start of November. There's now a problem rearing its head, as we had calculated $36,000 (£26,489) as the point where Bitcoin should almost certainly experience some hesitation. The market appears to have a different idea, as the value achieved a high of $35,000 before hysterics established themselves.

From our perspective, if Bitcoin were to somehow better $36,000 a new era would dawn as we cannot calculate any sort of ‘top’. Essentially, it could go anywhere.

Instead, we've no option but to suspect weakness may creep into the game. Alarm bells will ring if Bitcoin manages to trade below $28,900 anytime soon, as a correction toward $24,500 calculates as possible. Visually it's possible, and unfortunately our longer-term (or later in the session) secondary works out at $17,800.

• Defensive trust buys Bitcoin as a safe haven investment
• Market snapshot: Brexit reaction is encouraging

Source: Trends and Targets. Past performance is not a guide to future performance

As mentioned above, Wall St sloped off, the opposite of Europe in an overall confusing day. Perhaps the US managed to find convivial surroundings in which to do something more interesting than trade the markets!

The Dow Jones need only trade below 30,040 points to next enter a slight reversal cycle to 29,815 points with secondary, if broken, at 29,537. Visually, neither calculation is particularly threatening given the index behaviour over the last few months.

Source: Trends and Targets. Past performance is not a guide to future performance

Finally, we don't want to look at NatWest, but, as we analyse one of the banking sector at the start of every week, even a grudging look is better than no look at all!

Near term, it looks like weakness below 157p shall provoke reversals to an initial 152p and hopefully a bounce, given the position of the immediate uptrend. In the event 152p breaks, hopefully 142p shall provide a bottom.

The share price needs to better 170p to suggest happier days, calculating with an initial ambition at 180p with secondary, if bettered, at 188p. Either target will represent new 'post Covid-19' highs and suggest a positive attitude for the future.

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.