On Friday I wrote a piece on www.chartsview.co.uk illustrating the two main possibilities for SLE now it appears to have bounced off the gap up from a few weeks ago.
Here we have the bullish option where we've just had the end of a wave 2 (ie a higher low). This should result in a move up towards the recent 8.5p high (in 5 mini sub-waves) followed by a 50-60% retrace and then a breakout to new highs substantially above 8.5p. I've actually started to doubt this option due the the wedge shape on the last rise (a bear pennant), the fact that it's dropped back below the old downtrend resistance (causing a false breakout) and the apparent 5 wave move down from 8.5p to Thursday's low. The bearish option is as follows:
Here we have the bullish option where we've just had the end of a wave 2 (ie a higher low). This should result in a move up towards the recent 8.5p high (in 5 mini sub-waves) followed by a 50-60% retrace and then a breakout to new highs substantially above 8.5p. I've actually started to doubt this option due the the wedge shape on the last rise (a bear pennant), the fact that it's dropped back below the old downtrend resistance (causing a false breakout) and the apparent 5 wave move down from 8.5p to Thursday's low. The bearish option is as follows:
In this case SLE ought to be due a bounce anyway after forming a 5 wave pattern down. This bounce would take the form of a 3 wave move probably going no higher (and quite possibly not even as far as) the 61.8% Fib of the drop at about 7.2p.
It's hard to tell in real time which of these options is in play but one possible way to find a clue is to see how far it drops after an initial rise (and if that rise stops at the 38.2% Fib); a small drop before making a new high would probably be more likely to indicate that this bear case is in play. Perversely, a deeper drop is, IMHO, more likely to suggest the above bu