Special Feature
Gulf Keystone’s path to market for A lot is written about so called ‘gaps’ in the price movement of shares. Most of it is rubbish and Gulf Keystone unfortunately shows why. We’ve turned candles OFF on the chart displayed to illustrate movements as, in our opinion, they often serve to distort the history of the market. The movement from March 6th, circled in RED on the chart, represents something fairly basic. On the morning before the markets opened, the “nice people controlling the price of the shares” decided the time had come for the price to officially stop going up. Two important things occurred. The price opened down 5p and worse; this movement gapped the price below the uptrend shown in BLUE. This is never a comfortable signal as the implication given is simple. The market makers want some of their money back! Now, the price has a problem. At time of writing (14th May, 2012) it is at 192p. We have a long term target bottom showing of 184p and this level has been broken once, briefly intraday, a few weeks ago. Taking a bigger picture viewpoint, a target below this level exists and it’s at 100p.
Generally, we give a computed support level three chances. It may provide support twice but the third time can be the killer punch which introduces the bottom number of 100p into the frame. Shown in a RED box on the chart is a movement from August last year. During that dreadful month, GKP dropped below the long term support level. This movement suggests the black line ascending the bottom of the screen is perhaps not as solid as it looks. We thought we would look at something different on GKP. We don’t need to run through the billions of barrels of oil and the crazy valuations that have been calculated and talked about many times. One of the key potential influences for any GKP price rises is (as with any oily) “Getting the Oil to Market” and the Erbil Conference on May 20-21st 2012 called, “1st International Energy Arena” - Erbil (Energy and the Kurdistan Region’s Road to Development) - has, as one of its primary intentions, the highlighting of avenues open for the exporting of oil out of Kurdistan.
What usually occurs in this sort of instance is that a support level – 184p in this case – becomes a point around which the price will bounce, but until such time the price actually CLOSES above the 3 month downtrend shown in GREEN then we remain resolutely bearish.
June 2012 | www.financial-spread-betting.com | 69