Interactive Investor

Where next for star performer NatWest?

11th October 2021 08:38

Alistair Strang from Trends and Targets

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After recently hitting a 20-month high, independent analyst Alistair Strang looks at the odds of maintaining the momentum.

When we reviewed NatWest Group (LSE:NWG) shares three weeks ago, our criteria suggests above 217p should propel the price to 225p next. This thankfully proved correct but we’ve a slight concern regarding the initial surge to 225p.

The first two sessions where this target was achieved (29 & 30 Sept), the share steadfastly refused to actually close at or above 225p, instead opting for 224.6p and 224.9p as the close on the day.

In the period since, there has been a slight reversal, and now, obviously, the share price has closed above 225p on several occasions. In addition, it’s now flaffing around at the price level prior to the pandemic drop in 2020, this being something we should regard as encouraging, if we use the model of other world markets as an indicator.

Unfortunately, the last week has seen the FTSE 100 remaining remarkably resilient despite other world index’s retreating, making us wonder if some common ground shall be discovered as perhaps world markets heated up too fast, while the FTSE failed to make it out of the deep freeze.

For Natwest, the updated picture now suggests strength above 227.5p should enter a cycle toward 233p next. With closure above 233p, it should prove difficult to avoid a path opening up to 250p sometime in the future.

The share price needs to close a session below 219p to scupper our optimism and, to cause outright panic, trade below 208p.

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. 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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