NatWest: another happy year for these bank shares?
After hitting their best levels in almost 10 years, shares in the high street lender just had a bad week. Independent analyst Alistair Strang returns to his charts to see what might be going on.
13th January 2025 07:40
by Alistair Strang from Trends and Targets
When we reviewed NatWest Group (LSE:NWG) a few weeks ago, we laid out some criteria for a price reduction to 373p, a target achieved just the other day. During the course of the session, the price even managed to break our target, hitting a low of 369p. Now, there’s ample reason for some debate as to what’s next?
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As the chart shows, by closing the session at 374.4p, NatWest managed to end the session below the immediate Red uptrend (currently 381p), placing the share price in a zone where further trouble should be anticipated. To be realistic, we can allocate a trigger level at 367p, as below such a point risks tipping the scales in favour of a visit t an initial 354p with our secondary, if broken, a bottom down at a painful 341p and hopefully a solid bounce.
It’s interesting to note, when we paint a Blue downtrend since 2007 onto the chart, when the bank was known as Royal Bank of Scotland (RBS), there’s an arguable bounce point at 345p, the level of the most recent trend break in October last year.
So, what should be expected in a scenario where NatWest reverses to around 341p and actually bounces? We can calculate an initial longer-term 434p with our secondary, should such an ambition be exceeded, working out at a distant looking  472p and some almost certain hesitation.
Overall, similar to the other retail banks, the financial sector actually is currently lodging in a zone where some long-term optimism is permitted.
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.Â
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