NatWest Share Price: How Low Can NWG Dive?

NatWest share price started the week in the red amid bearish momentum in the UK banking sector. The NWG stock was among the worst performers in UK’s top equity index, the FTSE 100 index, plunging more than 4%. The stock has dipped by more than 4% in the past week and 3.23% in the year to date. Its total market cap also slipped to £23.75 billion.

Will NatWest Recover?

Banking has been one of the most volatile stocks this year so far, with the industry seemingly able to deliver both record profits at home as others disappear into the government-rescue abyss. The NatWest share price has staged a strong recovery since the coronavirus pandemic, where it plummeted to 97p lows. The NWG stock currently hovers 153% above its lowest level in 2020.

Recently, the UK government decided to sell almost 3% of its stake in NatWest shares. The UK government sold £1.26 billion of its stake, cutting the state’s shareholding to below 40% for the first time since the bank’s emergency bailout in 2008.

The government set a self-imposed deadline to fully privatize the NatWest bank by 2026, almost 18 years after taxpayers spent 46 billion pounds to save the bank from collapse. The government’s sell-off could spark bullish momentum around the NatWest share price.

Even so, despite being beneficial to the bank’s net margin, higher interest rates remain a huge concern for investors. Higher interest rates by the Bank of England (BoE) could spur a wave of defaults, forcing the British bank to allocate more funds for bad provisions, impacting the overall profits. The prospect of a recession could also tamper the bank’s shares.

NatWest Share Price Analysis

NatWest share price has been under intense pressure since the start of the year amid increased volatility in the banking sector. On the daily chart, the stock has remained below the 50-day and 100-day moving averages, while its Relative Strength Index (RSI) moves lower below the neutral zone.

Therefore, the NatWest share price is likely to continue falling amid increased selling pressure. If this happens, the next support levels to watch will be 252p and 238p. On the other hand, a move past the 50 DMA at 266p will invalidate the bearish thesis.

NWG Price Chart

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