Duration period always interests me. I’ve had some of my biggest gains lately on a combination of duration period analysis and Elliot Wave projections particularly in LEAP wireless.
These correlations outweighed downgrades, bizarre price action and prior trends over a long period of time.
All past posts on LEAP can be found here including those on its duration period probability.
Based on this past experience and the overwhelming correlations with duration period moves than can occur, it is encouraging to find similar positive correlations in GOL.
The weekly chart below outlines a very simple analysis- a duration period from the first week of April to the first week of May.
It is clear that more gains than those shown were possible in specific years. But because some of these gains were made even during downtrends, a short time frame was chosen.
At the very least using this conservative approach; buying into the lows of April and protecting any gain above 10% in the first week of May produced a good trade.
So far, the correlation to gains for this duration period is 100% with an average gain of 24% over the six years shown.
This duration period could be what unwinds the prior downtrends channel.
Pecent positive price change, derived from low of first week of April and high of first week of May.
2005 12.20 – 15.75 29%
2006 26.64 – 39.90 49%
2007 26.68 – 29.40 10%
2008 14.87 – 18.08 21%
2009 2.78 – 3.58 28%
2010 11.95 – 13.40 12%
2011 13.49 – ??