NatWest Share Price Forms Ascending Triangle Pattern. What Next?

Summary:
• The NatWest share price has been in a consolidation phase as investors watch the state of the UK economy. What next?

The NatWest share price has been in a consolidation phase as investors watch the state of the UK economy. The NWG stock is trading at 226.4p, about 28% above the lowest level this year and 10% lower than the YTD high. The company has a total market cap of over 23 billion pounds, making it one of the biggest banks in the UK. 

UK government to divest NWG shares.

Natwest, formerly known as Royal Bank of Scotland (RBS), is one of the biggest banks in the UK. But it also has a clouded past after it almost went bankrupt during the 2008/9 financial crisis. At the time, the government was forced to bail out the company by providing billions of pounds. 

In the past few years, the Conservative UK government decided to start selling its shareholding in the company. Already, the government has sold 703.5 million shares in the company. Those shares have helped it raise over 1.6 billion pounds.

In a statement on Wednesday, the government said that it will extend the divesting process for another 12 months to 11th August 2023. The goal is to completely take the company private in 2025 or 2026. It now owns about 48.5% of the company. This stake is worth over $11 billion. The statement said:

“Extending the trading plan supports the government’s intention to return NatWest Group to full private ownership by 2025-26, after acquiring the shareholding as a result of the global financial crisis.”

The biggest concern for the NatWest share price is that the UK economy is slowing as inflation keeps rising. Data published on Wednesday showed that the country’s consumer inflation surged to 9.1% in May while core inflation fell to 5.9%. In addition, producer inflation input and output surged 22.1% and 15.7%, respectively. Therefore, there is a likelihood that consumer spending and mortgage growth will slow dramatically.

NatWest share price forecast

The daily chart shows that the NWG stock price has been in a tight range in the past few weeks. The stock has moved above the 25-day and 50-day moving averages. It has formed an ascending triangle pattern while the MACD has moved above the neutral point. 

Therefore, there is a likelihood that the NatWest share price will likely keep rising as bulls target the key resistance level at 250p. However, a drop below the 210p will invalidate the bullish view.