Rkh June 2nd 2010

I've missed this and will now have to wait but the chart is very interesting and remarkably perfect TA-wise. There's quite a lot going on in the following chart but an explanation will follow:



dl.dropbox.com/u/20815047/RKHdaily08_01_13.gif

OK, first, we have a rare quadruple bullish RSI divergence which gave a strong buy signal. In fact if you go back to 25th July 2012 it's a quintuple divergence! We then had the recent breakout (mentioned on this thread) which was an inverse H&S breakout. This formed after a perfect 61.8% retrace of the inital wave 1 rise from the 143.25p low which is a perfect wave 2 target. The H%S target is given by the difference between the top (bottom for an inverse H&S) of the head and the neckline projected from the breakout point. This coincides with the natural resistance at 181p.

Having formed a perfect wave 2 at 150.27 we can project a wave 3 target by using Fib extensions. The most common target for wave 3 is the 161.8% extension and this comes in at 181p. Nice

According to EWT this should then retrace to the 100% extension which would equate to a wave 4 retrace of 38.2% before a wave 5 up possibly to the more serious resistance at 191.25p. Wave 5s often come with bearish RSI divergences so that would be something to look for looking ahead.

Having missed the boat (my order to go long on a backtest of the breakout at 163p didn't get filled as the backtest didn't occur (ref previous discussion on backtest entries on another thread), my strategy now would be to either wait for the wave 4 retrace possibly at around 170p (I wouldn't mind 163p ) or to wait longer for the retrace from the future wave 5 high (this should be the top of a larger degree wave 1 of course). We have to wait to see where that could be but if it continues to pan out according to EWT then it should be around the 163p mark anyway.

All in all, IMHO anyone who bought the breakout from 163p is unlikely to be in negative territory assuming it continues this perfect TA behaviour. Remember the dangers of assumption though!

well done ross.
did not spot that...dohhh

Thanks remo, really appreciated.

I did mention the 123 on my high quality chart LOL. About 15 topics down

chartsview.co.uk/technicals/620-123-low-rkh

RMc

Ps. And waiting for a backtest

here you go mate.

zoomed in


weekly chart


theres a 123 low breakout on this recently. im surprised no ones mentioned it as this is a popular share

Help please

If anyone could post a chart with this date included it would be much appreciated.
There is a dispute between 110 and 140 on the bear raid. I can only find 110.

Regards RMc