Is NatWest's share price rally over?
The retail bank had been trading at prices not seen for years but has fallen in recent weeks. Here's what independent analyst Alistair Strang's charts say could happen next.
9th September 2024 07:34
by Alistair Strang from Trends and Targets
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Looking at the NatWest Group (LSE:NWG) share price, it has (along with the rest of the retail banking sector) given shareholders hope, then sharply changed direction. Currently, there has been an immediate warning signal which starts to bother us.
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The share price, closing Friday 6th September at 328.4p, simply equalled the previous closing price low of a month earlier, at precisely 328.4p. This was an amazing coincidence but, unfortunately, it also allowed the closing price to end a session below the Red trend line (see insert).
From our perspective, this isn’t a happy signal, one which perhaps suggests the market intends moving in a converse direction despite expected central bank interest rate cuts.
NatWest is now sitting in a zone where movement to an initial 270p looks possible with our secondary, when broken, at 231p and a probable bottom. However, we’re inclined to suggest playing safe, assuming the previous spike downward to 309p could be regarded as a “safer” trigger level for serious reversals. On the bright side, a stop-loss could be placed around 330p.
Alternately, if the market intends a massive practical joke, should the Bank of England finally do something about high interest rates designed to stifle the economy, we need to look at the potentials if NatWest's share price intends to head upward.
Share price movement now above 343p should bring recovery to an initial 347p with our secondary, if beaten, at 364p. Closure above 364p shall now prove significant, turning the page toward a long-term attraction for a distant sounding 419p.
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.
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