Caveat and disclaimer first: This post is purely specualtive, based on EWT (with a bit of adjustment for key levels) and none of the levels may actually generate the projected action shown. In addition there has been no attempt to accurately portray timescales for these possible moves. This is merely to illustrate what could happen if theory plays out. It's also subject to a close and hold above 180p and conditional on not going below 151.25p beforehand.

Also, wave 2 should be at 138.5p but because this is a weekly chart that detail has been lost. The same applies to the 230p gap which remains on the daily chart.

What I've done here is to plot the horizontal blue lines of price resistance. These are at 218p, 230p and 260p. There are also resistances at 189p and, of course, 180p. Then I've plotted the Fib extension for (circled) wave iii. This is done by plotting Fib extensions of the move from 138.5p to 180p from the 151.25p low. We're looking for wave iii to come in around the 161.8% extension and that falls at exactly 218p, just where the natural resistance lies.

We'd then expect a retrace of about 38.2% of that wave iii which takes price back to 193p (it's the same as the 100% level shown on the set of purple Fib extensions which gave the 218p target). From there, a theoretical wave v equal in length to wave i takes the SP to approx 230p (it's actually 234p but I've adjusted this because of the daily gap).

That should complete wave 3 so then we'd expect a 38.2% retrace of that whole wave (ie from 138.5p to 230p) which takes the SP back down to 195p. EWT guidelines state that a wave 4 should not retrace below the low of the wave 4 of 1 lesser degree which, in this case, is 193p so that should be our key level to watch.

From there we should expect a final wave up to complete a set of 5 up from 129.25p. This is where it gets tricky and I've used a fair bit of poetic licence and an assumption that 230p will get taken out. In practice, the usual wave 5 = 1 guideline would give this top as a failed 5th at 224p. It's also possible that 230p will come back into play, so my target of 260p has been done on the above assumption of 230p getting taken out and also the fact that that would be the active target from the point and figure chart shown below on a close above 180p:

Also, wave 2 should be at 138.5p but because this is a weekly chart that detail has been lost. The same applies to the 230p gap which remains on the daily chart.

What I've done here is to plot the horizontal blue lines of price resistance. These are at 218p, 230p and 260p. There are also resistances at 189p and, of course, 180p. Then I've plotted the Fib extension for (circled) wave iii. This is done by plotting Fib extensions of the move from 138.5p to 180p from the 151.25p low. We're looking for wave iii to come in around the 161.8% extension and that falls at exactly 218p, just where the natural resistance lies.

We'd then expect a retrace of about 38.2% of that wave iii which takes price back to 193p (it's the same as the 100% level shown on the set of purple Fib extensions which gave the 218p target). From there, a theoretical wave v equal in length to wave i takes the SP to approx 230p (it's actually 234p but I've adjusted this because of the daily gap).

That should complete wave 3 so then we'd expect a 38.2% retrace of that whole wave (ie from 138.5p to 230p) which takes the SP back down to 195p. EWT guidelines state that a wave 4 should not retrace below the low of the wave 4 of 1 lesser degree which, in this case, is 193p so that should be our key level to watch.

From there we should expect a final wave up to complete a set of 5 up from 129.25p. This is where it gets tricky and I've used a fair bit of poetic licence and an assumption that 230p will get taken out. In practice, the usual wave 5 = 1 guideline would give this top as a failed 5th at 224p. It's also possible that 230p will come back into play, so my target of 260p has been done on the above assumption of 230p getting taken out and also the fact that that would be the active target from the point and figure chart shown below on a close above 180p:

Let's not get too carried away just yet though. There have been some positive developments over the weekend regarding the reported compromise over a new look BoD but we still need that 180p level to get taken out AND the SP to not go below 151.25p first.

In addition, even if this were to approximately play out, there still ought to be a wave 2 down to go with that larger degree wave 1 up which could bring the SP back down to around current levels (the projection has it at 180p - the key breakout point).

Make sure you're managing your own risk and using your own judgement whenever you trade. All of these analyses are subject to constant review and I cannot update the blog every time I see something new. We've already seen how there have been some unexpected moves (eg back below 166p, or the return to 129p but not 126p) and I'd be very surprised if there aren't some more.

In addition, even if this were to approximately play out, there still ought to be a wave 2 down to go with that larger degree wave 1 up which could bring the SP back down to around current levels (the projection has it at 180p - the key breakout point).

Make sure you're managing your own risk and using your own judgement whenever you trade. All of these analyses are subject to constant review and I cannot update the blog every time I see something new. We've already seen how there have been some unexpected moves (eg back below 166p, or the return to 129p but not 126p) and I'd be very surprised if there aren't some more.