Evening Bonobo,
I said I'd get back to you later but I've not had a lot of time so I'm winging it a bit here.
Firstly, I think it's dangerous to assume that today's low was THE low. There is plenty of support here but dojis can appear half way through a move as well as at turning points. In addition there's the following (very bearish) possibility:
Big bad bear option:
The move from 450 (465) to 141 was wave A down with B up to 260. C then should be a 5 wave move. This would give 1 of C down to 161, 2 up to 228 and we're in 3 now with a target (for wave 3 of C) at 68p. That would then be followed by a wave 4 of C up and a wave 5 of C down below 68p.
Now, before we all get hot under the collar, this is pure theory and, perhaps more importantly, corrective waves (an ABC sequence) are notoriously complex and unpredictable so I wouldn't hold much sway on those numbers. It does keep the 87p in play though. The rapid drop of the last few days kind of adds weight to this as the 3rd wave ought to be the longest and strongest and that's what we've seen. Add to that today's doji (which can appear mid range) and, well, you get the picture.
Optimistic big bull option:
IF today's low was THE low, then the whole wave structure from 4.5p days most likely (at the moment) means that 87p to 450p was wave 1 of 3 up (this major wave's version of 4.5p to 21p) and the drop from 450p to wherever it goes to is the wave 2 of 3.
You might think this unlikely given the sizes of the moves, but on log scale this makes perfect sense. Compare, for example, the %age change in price between the 4.5p to 21p move and that of the 87p to 450p move. Similar, no?
What's worrying about this option is that we're way below the 61% Fib we might expect for a wave 2. If correct, though, the projection of 87 to 450 from 131 comes in at 718p. Hmmmm....
The upshot is that it's really difficult to say until a bottom has been confirmed. The best confirmation we can get (nothing is 100%) is a higher low followed by a higher high. Only then can we really start to discuss upside targets with anything like authority.
One final note, if we look at the weekly chart (don't look at the P&F one if you want to keep your heart rate down!) then we could really, badly, do with a close above 161p tomorrow. That would set up a lovely weekly candle and leave us with having held onto 161p support on the weekly chart.
The only sensible way to play this is per remo's suggestion: wait for a higher low (should be at the 61 fib) and then go long on the breakout. Anything else has a large dose of gambling involved.
All the best in every way!
J.
