The Natwest share price is starting to roll over after jumping to a 2021 high of 222.30p last week, which may concern the bulls. By yesterday’s close, the shares had lost almost 4% since Friday and fallen in 3 out of the last 4 days. However, even in light of the recent weakness, NWG is 15% higher than on the 20th of July.
Natwest Group Plc (LSE: NWG) enjoyed an impressive run of form following the first-half earnings release at the end of July. And that’s hardly surprising considering the British bank comfortably beat analysts expectations, revealing a pre-tax profit of £2.5 billion for the six months to June. Furthermore, NatWest upped its shareholder payout target by £200 million to £1 billion for this year.
As a result, NWG cleared the 200p psychological barrier with ease, extending to 222.30p and setting an 18 month high. However, over the last week, the price has failed to progress higher and subsequently turned lower. Which is either a natural pause in the rally or the start of a deeper correction.
NWG Price forecast
The daily chart shows a clear line of support at 214.00p. This level was formerly significant resistance and now becomes the first line of support. Should Natwest slide below 214.00p, the next logical levels to watch are the 50-day moving average at 205.50p, the 100-day at 202.00p and the obvious £2.00 mark.
If the price loses the 200p threshold, it’s vulnerable to an extension lower to trend support around 189.00p. However, for now, the share price remains in a strong uptrend and above the significant support. Therefore, the trend is still positive.
Although the price has taken a step back, the strong fundamentals should illicite buying on dips. Therefore, I expect any sharp move lower to be brief and an opportunity for investors to acquire the stock on the cheap. This positive view remains as long as the Natwest share price remains above 200.00p. Although a close below this level invalidates the bullish outlook, and signals steeper losses may be possible.
Natwest share price chart (Daily)
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