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The NatWest share price is currently near its highest level since January 2020, driven by increased demand for the stock. NWG shares are trading at 227p, just below the year-to-date high of 230p, making it the best-performing bank stock in London.
NatWest is a prominent UK bank with a portfolio of well-known brands, including NatWest, Royal Bank of Scotland, Ulster Bank, Coutts, Adam & Company, and more. The company primarily operates within the UK, offering services such as retail and commercial banking, private banking, and NatWest Markets. As a result, NatWest’s performance is closely tied to the health of the UK economy and benefits when interest rates are high.
Currently, the UK is experiencing significant inflationary pressures, leading to speculation that the Bank of England (BOE) may tighten monetary policy sooner than expected. This scenario could be advantageous for NatWest. However, the looming threat of stagflation—where inflation rises while economic growth stagnates—poses a potential challenge. In such a situation, the BOE might struggle to raise rates effectively.
Technically, the daily chart shows that NWG shares have been in a strong bullish trend, forming an ascending channel highlighted in green. The stock is trading slightly above the 25-day and 50-day moving averages and remains above the Ichimoku cloud, suggesting continued upward momentum.
Given these factors, the stock is likely to keep rising, with bulls eyeing the next key resistance level at 250p. However, if the price drops below the support level at 200p, it would indicate that selling pressure remains, potentially reversing the current trend.