There's probably a lot of excitement on the bulletin boards after today with a lot of people calling for upward price movement and a break of 166p from here so I'll start with the 4 hour chart that will be causing that. There's more to add though so this might be a lengthy post.

We can clearly see a big hammer candle with bullish divergences apparently forming in RSI, MACD (not quite a proper one) and we also had Gary's chart in the previous comments showing a divergence in MFI (Money Flow Index) and how today's low fits with his harmonics and Fibs.

The 147p low was also very close to the 50% Fib of the rise from 126p to 166p which is at 146p some that might add to the idea that the retrace has done enough. There is another view though and it's one I favour.

First, the daily chart. Here it doesn't look quite so bullish as on the shorter term charts - there's no hammer (which should be at a key support anyway to be really valid and 147p isn't a key support) - and the candle pattern highlighted is actually a dark cloud cover which is a bearish pattern.

Candle patterns, like all aspects of TA, are not 100% reliable though and they usually need confirming by subsequent price action so we'll have to see what tomorrow brings for that. There is something else interesting going on though if we stick with the assumption that this is wave 5 of C.

Here's another view of the 4 hour chart, this time with price only. It's a bit messy so I'll try to keep it simple.

First, I've left off the indicators for simplicity. We've seen the possible divergences but if the indicators drop tomorrow they'll all have been negated anyway.

The series of brown Fibs are the retracement levels for the 126-166p move. That's straightforward. Then I've assumed that the move from 166p to 151p is subwave 1 of 5 of C down just to see what it would look like if it played out. The results are quite interesting.

The wave 3 target is given, in the theoretically perfect case, as the 161.8% extension of wave 1 from the end of wave 2. This is shown by the blue Fibs. What we see is that the target for wave 3 (of 5 of C) comes in bang on the 61.8% brown Fib ie right at the extpected target of there were a "perfect" wave 2. Remember, this level has been discussed in the bullish case earlier and is now appearing in the bearish version too.

Again, if we assume that this is what's happening, we would expect wave 4 (of 5 of C) to go back to the blue 100% Fib line (this equates to a 38.2% retracement of the wave 3 move) which happens to coincide nicely with what would have become resistance at 151p. Following that, a final wave 5 (of 5 of C) equal in length to wave 1 would take the SP back down to around the 135/137.5p area which was the original breakout point in the move up from 126p.

Not only are there some interesting coincidences here but, in addition to today's hammers, it also provides the City with a few nifty moves to scare the PI base: a big hammer fails, 141p gets hit and everyone thinks it's game on and loads up with leverage only to find that the price gets taken back down, hitting a load of stops before we bounce and move on.

OK. I realise that there's quite a lot of speculation in all of that but it is in keeping with the view I've had for a long time ie that of a wave 5 of C being required, It would also result in a truncated wave 5 of C which would also fit with the bullish "feel" to everything.

I'm not going to be banking on the above happening (well, not completely!) but it's an interesting theory. There's only one way to find out which way it'll go and the first part of that starts tomorrow at 8am. In the even that it's wrong, I'll simply go long on a break above 166p as there will then have been a higher low followed by a higher high. That's the safest thing to do anyway.