Rathbones (LON: RAT) share price is having a bad week and is down 3.4% since its weekly open. Our analysis shows that the stock price of the personal wealth management firm can tank a lot more before targeting more upside. The shares have shown a 6.4% recovery from their March lows and now retesting the 200-day moving average.
On Wednesday, UK shares depicted a mixed price action. The FTSE 100 Index remained strong and added to its weekly gains. At press time, the benchmark index is trading 31 points higher than its previous close. However, Rathbones shares remained red for the 3rd consecutive day and were down 0.81%.
According to the most recent Rathbones Group news, the company has announced an increase in its dividend this year. According to the publicly listed investment management company, it will pay £0.56 on 9th May. This means a 4.4% dividend yield. Rathbones share price has failed to react to the news.
In other major news, Rathbones is buying the UK wealth management arm of Investec for £839 million via an all-share merger. The merger will form a publicly listed wealth management group with assets worth £100 billion under its management. As per the details, Investec will maintain a 41.25% equity in the new entity with 29.9% citing rights.
The LON: RAT chart shows a formation of a double top pattern on the daily timeframe. The shares retested the April 2022 high of 2225p in February 2023 but failed to break above. A double-top pattern is a bearish reversal pattern that often leads to a major correction. The recent rejection from 200 MA has made the Rathbones share price forecast even more bearish.
Therefore, I expect the shares to make news yearly lows. A possible level of the bounce could be the upward trendline that has been drawn on the chart. This can potentially mean a price target of below 1700p. Another key level is the October 2022 low of 1550p which may also act as strong support.
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This post was last modified on %s = human-readable time difference 16:14