The Gulf Keystone Petroleum Limited (LON:GKP) share price is under pressure on Wednesday morning; GKP is trading 2.18 pct in the red having reached 150.15.
The moves lower come hot on the heals of the formation of a negative Momentum event at last night's close of 154.81.
This presents a short-term bearish opportunity for those looking to take positions on GKP.
Alerting us to the formation of the negative event on the Gulf Keystone Petroleum Limited share price are Recognia Inc. who say, "this bearish signal indicates that the stock price may fall from the close of 154.81."
What is a a Momentum indicator?
According to Recognia, Momentum measures the velocity of price changes.
"For a 10-bar momentum, we take the difference between the last bar's close and the close 10 bars ago and we plot this as a line fluctuating above and below 0 which can be used as buy and sell signals when in agreement with prevailing trend analysis," says a note issued following the release of the Gulf Keystone Petroleum alert.
Momentum is significant because it signals the strength of price trends.
A healthy price trend tends to exhibit strong momentum, while weakening trends often have decreasing momentum indicating a trend reversal or correction.
Morning market review
The FTSE 100 is under pressure today thanks to poor sentiment feeding through from the US and Asia overnight.
Commenting on some market happenings of note today is Jonathan Sudaria at Capital Spreads who says:
"A surprise drop in the US consumer confidence dented investors’ optimism keeping any attempt to move higher in close check. On the other hand, home prices rose at a slower pace than initially predicted which also invited a cautious approach going forward. So, the Dow Jones ended just 12 ticks higher at 16,216 but this morning bulls are again in the driving seat.
"An economic forecast done in Brussels sees the eurozone doing slightly better in the near future but lagging competitors like the US and China. However, the latest economic results in the US were a mixed bag which kept the shared currency and the greenback on an equal footing for more than a week. The EUR/USD pair finished at 1.3745, 10 points up for the day.
"The opening of the southern part of Keystone pipeline eased some supply pressure at Cushing. Nevertheless the US energy complex expects a builds in weekly crude inventories which will be released later today by the Department of Energy.
"Concerned investors did not want to take a risk and took profits yesterday, sending the WTI crude prices 75 cents down to $102.05 a barrel."