This is a headline that we have just seen. Our answer is “No it isn’t – not yet anyway”.
For anyone who buys RBS shares now, in the hope that they are about to rocket upwards, would be a high risk venture suitable only to those who welcome the adrenalin rush of trading ‘penny’ stocks.
RBS shares are, however, showing movement within a ‘Basing’ trend ( which started from the Jan’09 end of the steep Downtrend). The next stage, after the Basing stage, for this share should indeed be an Uptrend but this will not occur until the price has succeeded in rising above the resistance that will be presented at the 58p level. Only then should it be considered as a ‘buy’ for medium to long term investors.
(Click on the chart to enlarge).
For (shorter term) trdaers however there will be a ‘buy’ opportunity presented when the price rises above the resistance presented at the 43p level (this being the 50% retracement of the Aug-Dec’09 bear run (see the daily price chart below). Today the price is breaking above the 38p resistance and this could be the start of a short run up to the 43p level and, if the price should manage to get above 43p then there is a very good chance that it could move quickly up to the 58p level. So there could be a short term possible gain of some 10% if the price continues up to 43p (where it is likely to turn over again. But this hardly represents a “rocket increase” as some suggest!
For the moment, we would suggest that only those with deep pockets and not given to anxiety attacks should consider buying RBS shares.
RELY ON THE RELIABLE - TECHNICAL RESEARCH AND ANALYSIS FROM SHAREHUNTER.COM
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