A new upward move for Sirius Minerals?

It has been nearly a month since we looked at Sirius Minerals and so far, the share price hasn't done anything spectacular, other than prove our suspicion we had actually witnessed a spike up at the open, and the share price has performed as expected.

However, the reversal thankfully halted at 32.5p rather than hitting 31p and this left the immediate uptrend intact. The situation now is of movement below 34.5p currently breaking the immediate uptrend and pointing at coming reversal toward 27p initially with secondary 19.5p.

This would suggest quite a slowdown in its growth potentials, but still give considerable hope for the future as the longer-term immediate uptrend is currently 17p.

However, we were slightly interested in movements during 13 September. For the last few weeks, there's been something going on at the 40p level and the share price has now moved into a region where anything above 41p can easily provoke an initial 44.5p.

While perhaps this isn't interesting, it would indicate the fascination with 40p is over and further movement toward 49p would make a heck of a lot of sense. In fact, if such a twitch upward were backed with positive news, it could easily hit 59p.

Above 59p and our problem remains of target levels being a bit thin on the ground. This is why we're watching the share in the hope it experiences some gaps upward at the open, indicating the market wants a new uptrend to commence. Here's hoping.

Gulf Keystone Petroleum

Following our report yesterday on Gulf Keystone, we received a few emails asking for clarification about an opening second spike. During 2016, the use of "spikes" has diminished considerably, but they still happen. We feel the market employs them to provoke kneejerk reactions from traders, something instinctive which generally will cost private investors quite a bit of money.

Avoiding kneejerk reactions can prove difficult for humans. Jaclyn at Trends and Targets was getting married at the weekend and my single job was to give the bride away, something daughters seem to want.

After ensuring she was safely in the back seat of the wedding car, with none of her dress trailing under the door, I joined her on the back seat while she fussed with her dress/shoes/veil. Her flower bouquet was thrust at me to hold while she fiddled around and as I pulled my door closed, I came face to face with a wasp on the window.

Usain Bolt would have a problem with me, if alongside when a wasp buzzed in my ear. Encased in a car, my reaction was instant and I was even able to inflict a final malicious twist when I crushed the wasp against the glass. For several hours thereafter, Jaclyn talked at length about her (now very modified) flower bouquet being used to kill a wasp.

For GKP, if the share is moved below 1.8p at the open, we'd be inclined not to panic, as traditionally a spike down at the open is used to collect stops from folk who've looked at the previous low, bought while it's "cheap", placed a stop below 1.8p.

Additionally, it will scare the pants off private investors, perhaps forcing many to make a panic sale. Our rule of thumb is to expect a future rise with a spike down at the open, unless the low is exceeded by 9:30am or so.

Obviously, the converse applies with a spike up. We don't like the spike strategy, as it's designed to attack traders' panic buttons.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. 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.

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.