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NatWest’s share price remains strong, even as the UK government has reduced its stake in the bank to 53.96%, down from 54.75%. The bank also announced that the government plans to sell an additional 15% of the stock’s trading volume by August 2022 through UK Government Investments Ltd.
NatWest was one of the banks the UK government nationalized as part of a bailout during the 2008 global financial crisis. A similar process occurred with Lloyds Banking Group, where the government’s stake was reduced in December 2019. However, this move nearly caused Lloyds’ share price to plummet as the COVID-19 pandemic took hold shortly after.
NatWest appears to be in a much stronger position for this reduction in government ownership. With banks across the UK and Europe anticipating potential tapering of their respective quantitative easing programs by central banks, the upside potential for these stocks continues to grow. NatWest’s share price is up 0.75% today and looks poised to break out of the bullish flag pattern visible on the daily chart.
The daily candle has breached the double resistance formed by the flag’s upper boundary and the 214.5p resistance level. If the bulls can sustain this breakout and push above these levels, the path to 220.0p is clear. If 220.0p is surpassed, 228.3p could become the next target, completing the measured move following the flag’s breakout.
On the other hand, if the price is rejected at the 214.5p resistance, a pullback could occur, targeting 210.0p. A further decline could aim for 200.6p, with 205.0p potentially serving as an interim support level. A drop to 195.0p is also possible if the decline continues past 200.6p.