Hi Folks
This is a follow-up on yesterdays post.
Chart history doesn't necessarily repeat itself, but it can rhyme a lot. I am going to show two charts.
The first shows the peaks that happened in Jan, Feb and Mar earlier this year and the fall that ensured. I have highlighted the things to notice. Three descending peak highs with two lower-highs. The action between the first two peaks relatively mild. After the second peak a dramatic fall and then a 78% bounce to the third peak. Notice before the 78% bounce peek the 11c div was announced. Then a considerable fall one day after the bounce peak. On my second chart that's where I think we are currently. On this chart it took another three days to record a lower-low than the low that started the 78% DCB bounce. That new lower-low was followed by another bounce and then eventually fell to create a new lower low.
Switching to the current chart we have the same three descending peak highs with two lower-highs. The action between the first two peaks relatively mild. After the second peak a dramatic fall and then followed by a 75% bounce to the third peak. Notice that the quarterly results (implying another dividend) happened before the third peak. Then a considerable fall one day after the bounce peak. Does that sound familiar? That's where I think we are now.
Do I think that it will repeat precisely? No, but it could rhyme a lot. Fridays drop from the bounce high was not as dramatic as the previous one and had an afternoon bounce. I am not looking for a lower-low to form in another two days like last time. I will be watching firstly to see if there is a bounce off the last lower-low 4.58 to form a double bottom chart pattern ( outside chance 3 & under dice). Secondly if indeed a new lower-low forms, where it forms and then watching the size of the inevitable bounce from that.
I am mainly watching for turning point events. The list firstly below 4.82 and then watching what happens if it continues it way down to 4.58. a bounce off would be an event, going below 4.58 would also be and event. Lower-high and lower-lows are events. So a new lower-low between 4.58 and 4.27 another event.
The historical charts eventual bottom 3.35 was very dramatic. I very much doubt that something like that is likely to happen, however if a lower-low occurs under 4.27 ( 4 & under dice) then new targets come into play.
Sorry about all this waffling, but it does explain how I currently see the market and why I have that opinion.
Just the way I deal with the markets so that I am not surprised by what plays out, as always DYOR,
cheers lies
(20min delay)