GKN failing at resistanceWe like GKN over the medium term and hoped to see the shares break to new highs. This is looking increasingly unlikely in the short term as the shares stall at resistance. The bearish divergence on the RSI and the relative ratio is a concern. If the shares close at this level or lower (329p) then we will also have a nasty looking bearish engulfing candle.
Maybe a chance for a speculative short or to close longs and reassess.
GKN
Short GKNAround this upper trend line GKN looks like a short back to as low as the lower trend line. Be aware that the lack of a retest of the lowest trend line on its previous drop suggest that it could be worth taking money off earlier here rather than later.
I like how this is timing well for a short with the FTSE 100 and other indices, which appear to be due a correction via the same multidiagonal methods.
Buy GKNGKN has outperformed the benchmark index by over 10% in the last 3 months. The shares have completed a base formation on the weekly chart and look set to push higher over the medium to long term. Buy with a stop at 296p. We are targeting a move towards 416p
Break of Flag to upside in GKNPrice has broken flag after failing to reach lower tramline-a potential indication of strength.
The stock could also be starting wave 3 of Elliot wave theory which are long and strong in character.
Stop loss around 347 and targeting 440 initially which is about equal to the first wave 2 move.
I would say the aerospace industry will remain pretty strong given the current conditions of increasing passenger rates and demand for aerospace parts so a long position is fitting.
