GKP

I don't follow the fundamentals outside RNS's so wasn't aware yesterday that takeover mania had hit this share again lol. I was very surprised when this rise continued so far after the (second) breakout from 89p (particularly the rise to 111 after the 38.2% retrace from 108.50). Now all is clear.

That 38.2% fib retrace yesterday has been the only one in this mammoth rise so far. Normally one might expect a minimum 50% at some point on such fast ascents. I am not saying it will because I know how mad PI's get with TO talk (how quickly people forget!) but the first few days of next week will be interesting for sure.

F4T

Just two other things Diver,

What can we expect after the completion of wave 5 on the chart is it an ABC or 5 wave correction and should we continue above 119.65 which was the higher option 2 Wave 1 thru Wave 3 x 61.8% could we still be in wave 3.

Thanks

Diver, your a star and thank you for taking the time to explain that so well, excellent. I have produced the wave 5 possibilities' on a chart and I also found the RSI divergence requirements between waves 3 and 5 something I never knew so thanks again.

Maybe one day we could have the chartsview pro-am and have that round together would look forward to that.

Thanks again much appreciated.

SRB,
What you are looking at is a Fibonacci Extension as opposed to a Fib Retrace, and this attempts to give guidance as to the construction of the upcoming wave. This particular extension starts from the low at 72.25, up to the high at 89.00, then down to the low at 78.25. The 100% you see is generated by the chart and is a duplication of the pips from said low at 72.25, to 89.00, but starting from the low at 78.25.
Why bother with the extension? Well the formation of the wave gives guidance as to what we can expect next. A wave 3 needs at least 161.8% extension of wave 1, starting from the bottom of wave 2. If the wave does not achieve this it is probably an ABC correction.
In this instance we have already achieved 161.8%. So things are looking good for an impulsive 5 way move.
Wave 4 normally retraces between 23.6 > 38.2% of wave 3. GKP retraced to 97.25, an almost perfect 38.2%.
Wave 5 can be many things A duplication of wave 1. So that would be the ‘low at 72.25, up to the high at 89.00,’ which would result in wave 5 terminating at 114.02. It could also be a 61.8% of wave 1 thru 3. So, 61.8% of 72.25 > 108.50, resulting in wave 5 finishing at 119.70. It could also be a 161.8% extension of wave 4 resulting in wave 5 finishing at 115.45.
Apologies for not posting a chart with all the possible wave 5 endings but it's all rather messy and would only confuse. Better you produce it for yourself then you can see things clearly as you proceed.
To confirm the impulse we also need a divergence on the RSI between waves 3 and 5, i.e. the RSI at the top of wave 3 is higher than that at the top of wave 5. This reflects the dropping in bullish interest you would expect after the initial onslaught of a wave 3.
The thing to remember in this instance is, this is just an hourly chart and, as such, is of more interest to intraday traders than investors. However, the same disciplines apply in whatever timeframe you are trading in so all the above is relevant.
Sir Richard, if all the above is ‘teaching granny how to suck eggs’ I do apologise, however maybe it will be of some use to others.

The golf…… the wretched game! How it has the ability to grab you and reel you in I know not….but I’m hooked, and have been for many a year. Sad isn’t it! It’s actually very similar to trading in that, the more you learn the more realise you know very little. Ce sera huh!
Keep smiling. It’s the only answer

Forget that Diver I've just had another look and confirmed what time you posted so I presume the close on the 26th (95) was your guideline, what was confusing me was the candle that followed afterwards on your chart, anyway based now on what happened yesterday would you revise that fib chart at all as Im wondering if the first hours action could have been wave iv in your opinion,

Cheers

Hi Diver, I was just looking at your chart this morning in a bit more detail and I'm wondering if you could just clarify something for me. Your latest fib chart has the 0% at the bottom of wave b at 78.25 and the 100% retracement at 95.00 and therefore the extensions at 99.55 and 105.35, why 95 as the 100% I cant quite see where the 95 comes from.

Thanks for your help and how's your golf recently