Interactive Investor

How Royal Bank of Scotland shares could double

26th April 2017 10:13

Alistair Strang from Trends and Targets

Royal Bank of Scotland (LSE:RBS)

Completing our monthly look at the circus FTSE 100 sector is Royal Bank of Scotland, the bank that likes to say "Gotcha, Sucker". Except, on this occasion, it appears possible a different utterance is about to escape its vile portals.

Similar to Barclays, (read yesterday's article here), RBS had an immediate downtrend to better and it was at roughly 248.672p yesterday.

By closing the session on 25 April at 253.4p, the share price is now poised to move faster than a clipped toenail in an immaculate bedroom, heading towards your partner’s make-up table...

In theory, moves now above just 257p should generate 271p next but, frankly, we're too old and jaded to evince enthusiasm over such.

The really big deal looks like closure above 260p, the share certainly looking capable of producing such a miracle anytime soon.

If you look at the chart below, this 260p thing isn't rocket science, just common sense. We've mentioned the glass ceiling (a flat trend, really) at 260p repeatedly, announcing the notion that closure above this level should prove critical.

The share appears poised to do so.

To be clear, closure now above 260p moves this into a region where growth to 271p makes sense from a near-term perspective but, realistically, we'd expect 321p to make a guest appearance.

Then the future starts to become interesting as this brings the price into big picture realm,s as closure above the dashed blue line (310.376p at time of writing) makes continued growth to 354p quite practical.

At such a level, we will need to brew a fresh cup of tea to examine the leaves closely, due to us being teased by a theoretical 572p.

Finally, to give the share the curse of the final paragraph, if it drops below the red line (currently 208p) it's stuffed and probably heading to 96p as a bounce point.

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.