In April 2013, I viewed a Spreadbet Magazine article, that was bullish GulfSands Petroleum [GPX:LON].
Instantly on seeing the chart I recognised a High Quality Inverted Hunt Volatility Funnel [Inv HVF] in formation. In short I was very ‘Bearish’ from first glance.
I did a draw and concluded a weak rally would likely commence, possibly just running the 100p level.
HVF Law 101 -‘Key Levels of Significance’ are usually just run due to ‘Order Clustering’ at key round numbers.
From there, my suggested short point at 102p, I expected a collapse below 29p, in short less than 30% of the market Capitalisation to remain.
This was a Psychologically difficult call, during April 2013, I was bullish Oil and this was a Oil exploration company.
It seemed I invoked the ire of a few on Spread bet magazine, Gulfsands also appeared to have a sponshorship there with ‘positive’ newsflow blurbs, everywhere and regular coverage, almost universally bullish.
In the end this call was the precursor of 2 huge MacrEconomic, Geopoloitical Themes, Oil selling off from a high in Q3 2013 of $112 [All time high double top in 2011 in $130’s], all the way below $30 and A long run Stable Syrian Nation under Assad, being ravaged by ‘western backed’ Rebels.
Here was my take for the short call, in some charts. Sell at 102p on a Limit Order Initial Stop 120, later to RH3 of around 104p, Target 29 p.
Add to the trade and overall risk on the 79p level breaking [Just-in-Time entry] with Target remain 29p, stop the later confirmed RH3 of 104p.
Charts below, and the un told wind at my sales the coming oil crash & Syria unstability. GPX’s primary assets were Syrian.
Plus the Original Call on Youtube from April 2013 below
The Chart short call entry.
Later after an entry short is made at 102p, the pattern breaks the traditional ‘Just-in-Time’ Entry level at 79p, it does so impulsively.
A little later we have further progress, after a ‘2nd chance’ return move to the funnel.
There was a wind up set up after the second Interim run, leading to a strong pull back close to funnel entry, followed by a setting up around the 60p axis level before further spilling
Target was made.
HVF Law number 2 ‘Keep On Keeping on’, see’s GPX trade as low as 2p currently 6.75p after a volume bouncea day before Putin called Mission accomplished, as Zak refers in the podcast below.
Was it all just a conspiracy.. did certain people know what was coming?
The Podcast Link
Would you like to learn more about the power of HVF Theory?
Contact me on Trader@TheMarketSniper.com or look at our Products & Services page.