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There may be trouble ahead for investors in Royal Bank of Scotland

Published: 09:00 06 Feb 2016 GMT

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On January 11 Royal Bank of Scotland’s (LON:RBS) shares price broke below the red line on the chart. An uptrend dating back to 2009 has been broken and the stock has been in virtual freefall since.

At time of writing, it is trading around 232p and my expectation is for it to reach 225p on the immediate cycle.

The painful, very real danger comes if RBS actually closes below 225p as the next stop then is 117p.

Something about movements thus far in 2016 strike me as a bit fishy. The reversal from 300p at the start of the year has been enacted with clinical precision.

It's almost as if someone made a conscious decision to reduce the shares price by 1.5p per day, such has been the steady pace of descent.

Obviously, this is absurd as market forces should make this sort of thing impossible.

While we can speculate against what has caused this descent, the previous year had seen RBS experience a forced decline of 0.35p per day.

I hope we're on the final leg down as it's truly depressing constantly running the numbers against the object of so many peoples’ misery.

An additional frustration comes from the one-for-ten share consolidation back in 2012.

It was enacted, supposedly, to make the price more attractive. But it is with grim amusement I must note my ultimate bottom against RBS stands at 98.5p. I cannot calculate anything below such a level. Of course, this silly number, if divided by 10, comes to 9.8p which, from memory, was the low achieved in 2009 due to the financial crash.

RBS needs only better 250p currently to signal it is on the mend. The initial movement then would be to 260p. If that figure is bettered, then there is a chance we’ve seen the bottom of the cycle. Next stop 287p.

Now, this latter figure would be quite a big deal, suggesting the shares price is about to challenge the blue downtrend since the start of 2015.

In summary, only if RBS makes it above 287p will I dare express hope for its future. 

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