Can NatWest shares return to summer highs?
10th October 2022 07:41
by Alistair Strang from Trends and Targets
The high street bank had a strong summer, but is down 20% in the past few weeks at its lowest since May. Independent analyst Alistair Strang searches for reasons to remain positive.
The NatWest Group (LSE:NWG) share price continues to suffer a hangover from the glory days of 2009, a period when their share price hit rock-bottom at 9.5p. Currently trading around 230p, share splits conceal the salient fact that the true price, adjusting for splits, is around 22.5p. Any conclusion that the banking sector has not recovered from the 2009 shambles is correct.
Three weeks ago, when we reviewed NatWest, some optimism leaked into our report. Unfortunately, it appears the best efforts of the current prime minister successfully derailed hope for the future, parking the share in a zone where hope is suffering from its version of a supply chain crisis.
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The immediate situation is pretty vile, as below 216p now calculates with the potential of reversal to 200p, a price level where the visuals anticipate a bounce.
However, should the 200p level be broken, things risk becoming murky, thanks to the presence of our longer term secondary at 181p. At this point, there’s nothing on the chart hinting a rebound should be anticipated, making us a little nervous.
Past performance is not a guide to future performance
On the converse side of life, if NatWest intends to discover positive action, movement above 242p should apparently prove capable of a lift to an initial 251p.
Amazingly, above this level produces a truly amazing target of 294p, a price level which will demand we pick our jaw off the floor and hurriedly redo long term calculations as some “real” movement becomes possible.
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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