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.
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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.
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