Interactive Investor

The 'critical' price for Royal Bank of Scotland shares

21st March 2017 11:23

Alistair Strang from Trends and Targets

Royal Bank of Scotland (LSE:RBS)

It's easy to dislike banking shares at present. Everything is in hiatus, feeling like there's a major news event about to happen.

We last viewed Royal Bank of Scotland at the end of last month and, frankly, very little has changed.

The situation remains of a glass ceiling just below the 260p level and the need for the share price to actually close above this point (according to recent behaviour, 258.9p is critical) for the price to "prove" some growth is coming to 277p, maybe even 321p.

In fact, if we're generous, we should admit a rather more distant 354p would be on the radar if the share price would just close above the downtrend since 2008.

But for now, the share price is trapped in an imaginary circus ring with the rest of the clown acts.

Circled on the chart is one of our hated "GaGa" movements, this particular one feeding the price with sufficient force to bottom at 222p.

Oddly, despite numerous opportunities, the share price has not yet hit the 222p level, and now it appears such a movement would not be the worst thing in the world.

Essentially, trades near-term below 231p look capable of driving the share down to 222p and a bonk against the downtrend since 2015.

In itself, not awfully alarming as the share is required to slither below this trend to promote alarms, along with trouble in the direction of 205p

For now though, it's boring...

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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.