Articles for: Gann Analysis

When we last left Santos (STO:ASX) in Issue 309, it had suffered a significant sell-off in the aftermath of a 2-day trading halt due to a capital raising. The market was clearly oversold after falling 14.5% from the close of trading on 8 May to the close on 14 May. It then came back and made a first higher bottom on the 1-Day Swing Chart. I finished the analysis with the words, ‘this is yet again a time to watch this market carefully for a signal.’

Two names synonymous with Technical Analysis are Gann and Elliott, each having their die hard followers. As in many walks of life, people claim their area of study to be the best. Just look at diets, martial arts, weight loss programs or anything related to some kind of personal improvement. Practitioners of each style or method claim theirs is the best, hands down. The funny thing is most work in a similar manner to the same end. Trading in many ways is no different. I am a fan of the saying, “If it works use it!!”

It should be an interesting week ahead. At time of writing (Wednesday May 27th) several currency pairs are trading close to major 50% milestones or “half points.”

In recent articles I have been illustrating some of the difficulties that a market can present in trading, and Santos (STO:ASX) has been giving more than a few of them lately! In Issue 305 I showed a weekly chart which had the market sitting on the mid-point of the range from the June 2008 all-time high and the October 2008 low. At the time, I said that we needed to wait for a signal from the market, either that it was going to hold above the 50% level or that it was going to head lower. Chart 1 updates this earlier chart.