The technical analysis of GSK right now says that it is not a buy. As a hold, yes, but only if a new exit stop at 1235p is put into the market.
The point is that its dynamics have changed. Not only has it now reacted to a greater extent that any previous correction since the low in March’09 but also it has broken down through the lower edge of the uptrend price channel that has held sway since April ’09.
From the weekly chart you can see the strength of the resistance of the 1350p level. And, looking at the positive side of the coin, the Uptrend is still in place so the price should recover (even if the trend is in the very early ‘warning’ stage of possible change) and is likely to want to take another test of the 1350p resistance. It is that test that is likely to give a good indication of whether or not the trend is going to change.
So, conclusion – OK hang on in there but with a definite stop at 1235p as it may want to have another bash at the 1350p level.
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