Boston, MA 10/17/2013 (wallstreetpr) – When Goodrich Petroleum Corporation (NYSE:GDP) (Closed: $27.80, Up: 6.11%) made a new 3 day low in the opening minutes on Wednesday, few expected it to rally to a new 5 day high by the closing bell but it did just that. The candle produced was a very bullish one called as Bullish Engulfing. The volume certainly supported the bullish sentiment as it surged to a 3 year high of 8 million against an average of 2 million.
The weekly RSI is in the overbought state for a long time now and is showing no sign of coming out of that immediately. That is a sign of nice strength on the part of the bulls who still want to take the price higher after a 4 month long rally.
A closer glance at the rally from the 2012 bottom of $7.77 reveals 4 major corrections and 2 minor corrections in it. The first major correction, in March – June 2013, lost about 5 points. Both the next 3 corrections lost about equal, 4 points. The last correction from the October 2013 top of $28.55 to $24.51 maintained the symmetry. Naturally, a rally was produced next and a move above $29 – $29.30 in the next few sessions should start the next phase of the vertical rally. If the breakout really takes place, then we can mark the correction from the September top of $27.65 as a Running Correction which would imply tremendous bullish strength.
The longer term chart shows a Falling Wedge or Ending Diagonal pattern ending at the 2012 bottom of $7.77, which gives us a minimum target of $31.39 and even $37.80, coinciding with the 38.2% retracement level of the entire fall from the 2008 top to the 2012 bottom. Major supports can be expected at the 2011 top of $23.80 and the 2012 top of $20.67 levels.
