GKP - Research

Diver, thanks for your reply. In response, I hope I can answer Bonobo's question purely from a theoretical standpoint ie if GKP follows EWT then the answer to Bonobo's question automatically emerges.

Most impulse waves have one extended subwave. This is most commonly the 3rd, sometimes the 5th and almost never the 1st. To that end we can denote the 1st subwave of an impulse to have unit length. In GKP's case (if we are assuming that it is in an impulse as opposed to a corrective wave), this 1st wave was from 161p to 187.7p. That's 26.7p obviously.

Let's also assume that the move up from 172p was/is the 3rd wave and that it's extended per the norm (after all, it did retrace almost exactly the "correct" amount of 61.8% for a wave 2). An extended wave is, in fact, normally 161.8% of the unit (1st) wave, not the 261.8% figure you've used according to EWT. I won't go into the maths here but that is definitely what EWT says about the theoretical length of an extended wave.

So, wave 3 ought to be 161.8% of 26.7p which is 43.2p. Add this to the assumed wave 2 low and we get 215.2p. This is uncannily close to the natural resistance at 217p which was a nice coincidence. In reality it's hit 220p and then dropped back to close below the 161.8% Fib.

Again, if we assume 220p to have been the real top of wave 3 then we'd expect a 38.2% retrace theoretically. This would take us to 220-(220-172)x0.382 which is 201.7p. That's the theoretical level for a wave 4 assuming that this series is impulsive. 203/4p is pretty close to this is it not?

Further, EWT suggests that if the 3rd wave is extended then the 5th is likely to be no more than equal to the 1st wave. Let's assume it's exactly equal at 26.7p. We add this to the theoretical wave 4 low of 201.7p and we get 228.4p for the wave 5 target. Remarkably close to the gap resistance at 230p, no?

So, I'd favour a drop back to that key area (in fact a backtest of the breakout from 204p would be sufficient for me) before rising to fill the gap. That would complete 5 waves up and the 1st wave up of a larger degree series.

And what do we expect after a 1st wave up? The theoretical norm would be a 61.8% retrace and guess where that would take it? You've guessed it...a backtest of the breakout from 187p.

Of course, it's very dangerous to assume that theory will play out and we should always trade what we see in front of us but it is quite uncanny how theory so often fits with natural supports and resistances. I didn't call 161p as the low but I did state it as an important support level. Despite what some may say, theoretically until there's a retrace which stays above 200p followed by a new high above 220p there's still a possibility that this whole sequence from 161p is corrective rather than impulsive.

I will not be assuming that the theory above will play out. I will bear it in mind but you never know. Here are some of the Fib sequences I've discussed on a chart. They're colour coded so you know which Fib lines belong to which sequences:



dl.dropbox.com/u/20815047/GKPdaily12_01_13.gif

Remo,

Thank you very much for your reply. Really appreciated. I now understand the 123 signal now.

BTW I always use daily chart, 5 minutes chart. Not for trade, you know. I just for fun.

Fa

hi food4thought
Thanks for your concern
but ive been beating the markets for a very long time now and you just have to look at my recommendation .I trade every thing out there so to do that its very difficult. Just go through all my post and see how many tips ive given.(Just look at my recent blog on trades update) You also need to bear in mind i have a system and i take profits pretty quickly.
this subject is arguable so lets just agree to disagree.
thanks mate

Food4Thought wrote: Remo,

it seems we have different definitions of the word crowd. My definition is the majority and it is the majority of transactions that move the market. I am not sure what your definition is. Perhaps you mean the majority of amateur PI's that post on public internet forums.

If that is the case then I agree.

If not, then be careful in thinking that you can beat the market mate. Contrarians never win in the long term, that is a fact.

I am going to leave it there.

F4T

hi greenhill
on my chart on the 10th jan i have labelled the 123 breakout.

heres is a close up



here is another example with the higher highs and lows labelled.


dl.dropbox.com/u/4899609/gkp123example.png

heres the link to the 123 low write up in the learning section that may help you to understand it better.
chartsview.co.uk/learning/123-low.html

on my chart i have the resistance as 217.5 and that level got tested on Friday and it held.

203 is support and also the trendline at 163 (changes daily). since your using the monthly its harder to be precise so you should look at it from a daily view to be able to get a more accurate price.
so both the levels you mentioned are more or less there as support.
I think your chart is of a daily chart and not monthly.

hope this is helpful

I believe GKP rising is the rolling coast again. As those brokers have to write the articles for encourage people to buy shares, obviously GKP is one very contradictory attracted shares. The political problem is having in favour of GKP, but not break thru yet. Interesting time and also anxious time. The court case still has some months to get the judgement results.

This recent rise is due to the brokers recommendations. Nothing changed from the end of Dec to the recent a few days in terms of news.

Remo,

it seems we have different definitions of the word crowd. My definition is the majority and it is the majority of transactions that move the market. I am not sure what your definition is. Perhaps you mean the majority of amateur PI's that post on public internet forums.

If that is the case then I agree.

If not, then be careful in thinking that you can beat the market mate. Contrarians never win in the long term, that is a fact.

I am going to leave it there.

F4T