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NatWest Group’s (NWG) share price has been relatively stable since last week, following a significant 20% drop in March 2023. However, the shares have started to recover, gaining 12% from their March lows and currently trading above the 200-day moving average. There’s a potential for the stock to retest the 284p resistance level in the near future.
In the first trading session of the week, most UK bank stocks saw positive movement. At the time of writing, NatWest Group’s share price in the UK is at 559p, reflecting a 1.67% increase during today’s session. Other major banks like HSBC, Lloyds, and Barclays are also experiencing upward trends.
While the US and European Union are taking significant measures to address the ongoing banking crisis, the UK government is still managing the long-term impacts of the 2008 financial crisis. Back then, NatWest Group, known as the Royal Bank of Scotland, was bailed out by the UK government, which acquired a 42% stake in the bank.
Currently, the British government still holds that stake in NatWest Group. Amid rising concerns in the banking sector, the government has decided to retain its stake for another two years. This decision is favorable for NatWest’s share price, as it eliminates the risk of selling pressure from one of its largest shareholders.
A technical analysis of the LON: NWG chart indicates that the stock is in the process of recovering from its recent decline. The shares are currently trading above the 200-day moving average on the daily chart, signaling strength. There appears to be solid demand at the current levels, as buyers are countering the selling pressure.
In the days ahead, it’s likely that the stock could move up to test the 284p resistance level, given the ongoing consolidation. However, this optimistic outlook would be negated if the stock closes below the 200-day moving average.