Interactive Investor

Why I have real concerns about the future of NatWest's share price

20th June 2022 07:32

Alistair Strang from Trends and Targets

It's one of the best performing bank shares this year but has still underperformed the wider UK market. Independent analyst Alistair Strang gives an update on the charts for this widely-owned high street lender. 

Something is distinctly wrong in the UK. Prices are being driven up, stock markets are behaving quite badly, and rather than enjoy our usual optimistic attitude, we’re increasingly worried as to what to expect during the rest of this year.

Worse, it’s not just the UK stock market behaving quite poorly, similar misbehaviour is being noted worldwide, and the current loss of confidence in bitcoin, recently thought of as a “safe haven”, is most emphatically not a UK problem.

With this seasoning of anxiety, we’ve some real concerns for the future of the NatWest Group (LSE:NWG) share price.

Currently, below 215p risks triggering some reversal to an initial 201p. Such a target quite neatly matches the Red uptrend since 2020 and will hopefully provide sufficient excuse for some sort of bounce.

However, should 201p break, our secondary calculates at 180p. This secondary ambition creates a painful visual problem, taking the share price below Red and into a zone where our third level drop target introduces itself at 116p.
We’d like to describe this third level as “ridiculous”, were it not for the unpleasant reality of it matching the lows of 2020.

Past performance is not a guide to future performance.

If something is indeed “wrong” in the UK and we’re about to face some unpleasant market retreats, NatWest at 116p would certainly produce an excellent level from which to hope for a future rebound.

Currently the share price requires to exceed 235p to once again bring hope to the table as it’s easy to imagine a cycle to 270 and beyond commencing.

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. 

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