GKP

Thankyou as ever Mr J.
I have watched this share over the years and moves seem to happen with indecent rapidity and if what you suggest transpires,then the question is whether to exit positions just north of 130 or at the gap around 140?
I know it's only a few points but they all add up.

IMHO if there's a 123-low breakout on this then the really key area is 127p. If it can get above (and preferably close above) than then there's a reasonable chance that the bottom is in at 82p. That doesn't mean it'll power on though - there's massive resistance in the gap area between 138p and 144p. Here's a daily chart which I'll try to explain briefly:



dl.dropboxusercontent.com/u/20815047/GKPdaily12_04_14.png

I said in chat a while ago that the form of any initial rise should help us identify where this is going. However, as it's GKP, there's still room for doubt lol!

The question is whether the rise from 82p to 108.5p (109p) has a 3 wave form or a 5 wave form. If it's the former then it's unlikely that 82p was the bottom. The funny thing is, that little triangle throws a little doubt on the matter. You can see it more clearly on an hourly:



dl.dropboxusercontent.com/u/20815047/GKPhourly12_04_14.png

As you can see, the move up can easily be counted both ways (not uncommon) but the fact that it bounced off the 61% Fib at 92.5p (so far) is encouraging as it's deep enough to be a wave 2 (I'd expect a B wave to have bounced higher).

Since this does not give us sufficient clarity, the next best thing we can look to, assuming a 123-low breakout does occur, is where the next short term top comes in. The previous bounce off 97p in mid March went to 127p. This is therefore our cut-off area; a move above that would suggest that the current move from 82p is unlikely to be corrective (ie followed by new lows) since it would violate the EWT wave 4 *guideline* (emphasis on guideline - it's NOT a rule). If 127p holds it back then we're still in doubt and will have to wait for other signs (which I won't go into now).

If bullish then the target for the next move up (again, caveat "assuming it happens") should be 134p and this ties in with my view of the importance of 127p. That said, even if 127p holds it back it doesn't mean it's not bullish - it's all about balance of probability!

Either way, there's huge resistance in the 127-144p area so that would be a good place to take profit (caveat) IMHO.

Interestingly (and speculatively) a bullish sequence of minor waves here should, in theory, go as follows: 82p > 108/9p > 92p > 134p > 117p > 143p and then a retrace to c. 105p and that ties in nicely with the gap where we'd expect a decent pullback anyway.

What jolly fun this share has been!

Good luck!

This is a closer view of the chart posted yesterday....
dl.dropboxusercontent.com/u/7238706/Gulf...%20%2812April%29.png

....it details the fib extension from the low at 82.00 > 109.00 > 92.12(yesterday). For an ABC one would expect a target of between 100 - 123.60%. For an impulse we should be looking for at least 161.80%. There is a low from May 8th 2013 which needs to be broken to confirm the uptrend. At the moment this is at 123.60% so, this move has either a little more to drop before moving on - doubtful looking at yesterdays candle - or it will turn at 126.38 and form an ABC, which could be part of the first wave in an impulse, or, it could steam on passed 126.38 to the gap area above the 161.80% between 120.62 > 143.00.

Interesting times ahead

Should we get the close above 110 I have the initial target at 125.67 which also coincides with the down trend line on the 17th April which is also previous resistance so interesting area to aim for initially.

www.screencast.com/t/WshggPwx

SRB,

As an example of, not straight forward impulse and corrective waves, take a look at this chart for EUR/GBP....

dl.dropboxusercontent.com/u/7238706/eurGBP%20%28-%29.png
The (( B )) wave ending at 0.8815 is a 5 wave impulse but hardly the archetypal 5 wave move seen illustrated in the text books. The ABC that follows it is still in the making with an extension in the C wave. This is what I mean when I warn not to expect simple pattern follow structures. Hope this helps

SRB,

Your supposition is correct but, those waves need not be straight forward and can contain extensions and complexities, especially if past performance is any guide.

The golf today was suicidal: the wheels not only came off but shattered. I am beside myself with grief

Have a great weekend and lets look forward to wave 3 without undue delay:)