Author: Thierry Laduguie
Shares in BP tumbled following an explosion
on a rig in the Gulf of Mexico.
Today the share price is
bouncing back as brokers rush to recommend the stock to
investors. Looking at the long term chart, the chances are
BP shares will continue to slide until they drop below 500p,
see:
The long term pattern is a
typical consolidation in five waves [(A),(B),(C),(D),(E)].
Consolidations are continuation patterns which means, once
the consolidation is done prices will continue to move
in the original direction prior to the start of the pattern.
In this example the trend prior
to 2000 was up, so expect the next long term move to be up.
But before the long term uptrend resumes, prices are likely
to fall to 470p-490p to complete wave (E) of a potential
running triangle.
This is the most likely scenario
according to Elliott wave analysis, the decline would be
over in the next few months, then we can look forward to the
start of a long term advance that would carry prices to 800p
and higher.
If you would like to learn the
techniques I use to forecast UK stocks (short term) click:
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