Should you fear the worst for Gulf Keystone Petroleum shares?
It has lost momentum, and our chartist believes Gulf Keystone's share price must do this to prevent a sharp turn lower.
Gulf Keystone Petroleum (LSE:GKP)
Our report on Gulf Keystone Petroleum (LSE:GKP) last October proved an exercise in futility. The share price has utterly failed to trigger any upward moves, instead teasing with threats of some coming reversals.
As the blue downtrend on the chart below highlights, an impressive effort is taking place to stop it going up!
At present, trading at around 221p, the share price needs to actually close a session above 234p before we dare make an assumption of some price recovery commencing. Such a trigger event should prove capable of an initial 257p.
If bettered, secondary calculates at a longer-term (and game changing) ambition of 284p. Visually, there's a pretty firm threat of 284p, if achieved, forming some sort of glass ceiling at some point. There's little doubt the market has placed some sort of importance at this sort of level and if we place safe, allocating above 300p as a sensible trigger level for long term recovery will make sense.
Unfortunately, it appears more likely that trades below 215p will drive the price down to 203p initially, along with some sort of bounce. It's critical, if 203p breaks, to remember our secondary calculates at 178p.
There is a really big problem if the share price makes it below 165p in the future. While we can calculate 125p as a drop target, it would be worth remembering the share has entered a zone with a logical bottom down at 35p.
For now, thanks to its lack of activity in heading upward, we fear the worst for GKP's future.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.