Royal Bank of Scotland 27/05/2020

#Gold #SP500 Our monthly visit to the banking sector often feels somewhat otiose. With the sector still resolutely feeling the effects of Covid-19, #RBS has failed do anything useful in the recent months, other than inflict a tedious comedienne on TV viewers. Except there is one important detail worth considering…

RBS’ share price is giving a completely solid impression the lowest it’s going to go is 100p and doubtless presenting an attractive proposition for traders. Since Coronavirus hit, RBS has carefully caressed 100p, crucially not breaking below this level. Visually, it’s almost like the stock market is presenting a sure thing! It’s perhaps worth remembering, similar to “politician & integrity”, the words “sure thing” & “stock market” do not belong in the same sentence.

 

To focus on the dangerous side of life, it now looks possible if RBS’ share price shuffles below 100p, reversal to an initial 89p looks possible. Should the 89p level break on the day of an initial surge downward, ultimate bottom calculates at 50p. This is the level we cannot calculate below, thus we’d ideally hope for a rebound before such a target level is reached. Our reasoning for this is fairly brutal, insofar should this theoretical 50p break, meaningful recovery becomes very difficult.

Of course, we’ve a “however” thanks to the current period of lethargic behaviour.

 

Should the stock market decide to employ its sense of humour, we shall not be aghast to see RBS share price spiked downward below the 100p level in the opening second of trade, if the market discovers sufficient excuse. Ideally, were the price to hit (or come close to) the 89p level at the open, we’d take this as warning the share is intended to enact some real recovery, even though it breaks below the 100p ‘floor’ level. Our theory why this sort of nonsense may be possible is based on the premise the stock market is not a charity and instead, is in business to make money.

So imagine a share where loads of “smart” traders have been viewing price movements, convincing themselves 100p shall not break. But to be safe, they’ve perhaps established a “Stop Loss” just below the 100p level. If the market felt an upward surge was possible, dropping the price to collect all the “Stop Losses” makes some sense as it also releases a tranche of shares into the hands of stock brokers.

 

Of course, we can present a scenario which doesn’t need delve into the realms of what sounds like a conspiracy theory. Near term, movements above just 113p are supposed to be capable of an initial 119p. If exceeded, our secondary longer term target calculates at 133p, along with a requirement we again stir the tea leaves. Visually, 123p is believable and matches the Glass Ceiling formed in recent months. Only with closure above 123p dare we express real hope we’ve seen the worst RBS can inflict on traders.

Hey, chart goes here

FUTURES

Time Issued Market Price At Issue Short Entry Fast Exit Slow Exit Stop Long Entry Fast Exit Slow Exit Stop Prior
10:18:30PM BRENT 36.63
10:22:46PM GOLD 1710.86 1708 1691 1689 1717 1730 1739.5 1750 1720 Success
10:25:40PM FTSE 6051.97
10:35:19PM FRANCE 4587.2 ‘cess
10:36:51PM GERMANY 11476 ‘cess
10:38:21PM US500 2997.52 2987 2980 2965 3015 3025 3033 3046 3000 ‘cess
10:40:24PM DOW 25055 Success
10:42:29PM NASDAQ 9416.62 Shambles
10:45:32PM JAPAN 21268 Success

 

26/05/2020 FTSE Closed at 6067 points. Change of 1.23%. Total value traded through LSE was: £ 6,530,822,409 a change of 28.08%
22/05/2020 FTSE Closed at 5993 points. Change of -0.37%. Total value traded through LSE was: £ 5,099,177,715 a change of -23.47%
21/05/2020 FTSE Closed at 6015 points. Change of -0.86%. Total value traded through LSE was: £ 6,663,000,786 a change of 12.03%
20/05/2020 FTSE Closed at 6067 points. Change of 1.08%. Total value traded through LSE was: £ 5,947,398,391 a change of 10.61%
19/05/2020 FTSE Closed at 6002 points. Change of -0.76%. Total value traded through LSE was: £ 5,376,891,155 a change of -9.59%
18/05/2020 FTSE Closed at 6048 points. Change of 4.29%. Total value traded through LSE was: £ 5,947,351,021 a change of 14.48%
15/05/2020 FTSE Closed at 5799 points. Change of -100%. Total value traded through LSE was: £ 5,195,107,449 a change of 0%

 

 

 

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