#Brent #Dax We previously reviewed Natwest on 4th January, explaining our thoughts on weakness to 152 and hopefully a bounce. The next day, it hit 152p and started a bounce, one which reached a fairly useless 169p. The important detail behind the scenario was “proof” sufficient numbers of people are still watching trend lines, believing them important.
We’ve experienced considerable doubts over the veracity of conventional crayon drawn trends as often, in these panic pandemic times, prices simply blast through visual trends as if they don’t exist. The reality with a popular share such as Natwest was clearly, if sufficient numbers of people believe a trend line to be real, the trend line will be real – at least for a while. Unfortunately for Natwest, this collective belief in trend lines lasted just 10 days and we suspect things are about to go a bit wrong for the share price.
Visually, with Natwest breaking the uptrend since September, the next tripwire remains at the previous 152p level. Coming movements below 152p risk triggering reversal down to an initial 143p and a doubtless short lived bounce. Again, our theory about sufficient numbers of people believing something should hold true. Achieving 143p will, more or less, match the share price low in December. We’d warning, if 143p is broken, especially on the initial surge down to such a level, our secondary longer term drop target calculates down at 126p and we think a real rebound can be expected, given the visual implications.
Earlier last year, when prices were being driven down due to building Covid-19 hysteria, a very vague Blue trend formed and our above drop target of 126p comes pretty close to matching the point of trend break. Again, it will depend on how many people employ Blue crayons but should 126p make a guest appearance, it shall provide an excellent visual point to take a Long position and just see where things go in the months ahead.
As always, we’re perhaps being too gloomy, especially as the writer got a Text Message from Scotlands Nicola Sturgeon the other day, promising a Covid-19 vaccination in a few days. Which was nice, doubtless supposed to bring cheer! Once the countries NHS gets hold of a mobile phone number, they are serious about keeping in touch with personal updates.
For Natwest to give hope for the future, the share price presently needs exceed 172p, allegedly capable of bringing recovery to an initial 182p with secondary, if bettered, at 192p. Visually neither ambition is earth shattering but does take the price into a region where it shall be regarded as achieving “higher highs” with the promise of good things for the future. Perhaps Nicola should send them a text message!
FUTURES
| Time Issued | Market | Price At Issue | Short Entry | Fast Exit | Slow Exit | Stop | Long Entry | Fast Exit | Slow Exit | Stop | Prior |
| 9:18:04PM | BRENT | 55.01 | 54.4 | 54.105 | 53.3 | 55.48 | 55.92 | 56.23 | 56.84 | 54.86 | Success |
| 9:20:34PM | GOLD | 1856.26 | ‘cess | ||||||||
| 9:30:17PM | FTSE | 6689 | Success | ||||||||
| 9:44:50PM | FRANCE | 5557.7 | Success | ||||||||
| 9:46:57PM | GERMANY | 13869 | 13783 | 13749.5 | 13696 | 13911 | 13909 | 13934.5 | 14000 | 13848 | Success |
| 9:54:47PM | US500 | 3837.75 | ‘cess | ||||||||
| 9:57:10PM | DOW | 30995.9 | Success | ||||||||
| 10:02:29PM | NASDAQ | 13365 | |||||||||
| 10:05:00PM | JAPAN | 28574 | ‘cess |