The price point where Gulf Keystone must bounce

Gulf Keystone Petroleum (LSE:GKP)

For Gulf Keystone, the misery continues with an added frisson of another kicking too.

The share price needs to trade above the blue line, currently around 119.403p, to signal the immediate downtrend has eased and the price is entering a phase toward an initial 125p with secondary, if bettered, at a more useful longer term 135p.

The problem we have at the 135p level is the pretend glass ceiling that has formed just above the 130p point this year. It tends to suggest closure above 130p shall prove crucial in any future climb to 158p, rather annoyingly challenging the prior high.

That's about the end of any positive spin as trades now below 108p virtually scream of coming reversal toward 100p initially and hopefully some sort of bounce.

While there are a couple of residual arguments telling us the price must bounce in the upper 90s, our ruling logic now points out the danger of closure below 100p provoking an ultimate bottom at 72p.

To summarise, we suspect this shall bounce at 100p, hopefully just above, as the threat of 72p comes with the unpleasant detail we cannot calculate anything below.

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. 

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