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GKP daily 19/09/13

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Depending on your view, the gap stands at either 193p (the high of the previous day - ignore the big green candle low) or at 187.75p which was the close of the previous day. I prefer the latter for determining stops.

In addition, we have the breakout point at 189.75p, the uptrend support which will be at 183.5p today (Fri), the 50% Fib of the 129-240 move at 184.5p, the 50% Fib of 126-240 at 183.2p and the doji from 6th Sept at 184p. Pick you own from that bunch but I'd have a stop below the trendline in case it goes.

If the trendline does break then I'd look to 171p as the 61% Fib of the 126-240 move for a target for wave 2 down from 240p with a stop below 166p.

Looking at RSI we can see that it's almost back at the main uptrend support which adds weight to the 183-193 target area. This RSI support will provide us with a clue as to whether any bounce off the 183-193 area could be just that - a bounce - in that if price is still above the uptrend support but this RSI fails then it will suggest that the lower 171p target is in play.

In summary: look for a bounce off that 183-193 area in conjunction with an RSI bounce. If RSI subsequently fails then look to 171p with stops below 166p.

At this stage we cannot be sure which wave we're in so it's best to use other methods such as standard S&Rs (which we should be using anyway with waves only as a guide).

Little doubt that a new uptrend is in play though, but I would like to see a close above 230p and then 260p to be completely sure!
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Guest Tuesday, 20 November 2018