BAE Systems - One to watch

Data are starting to provide weight to the idea that BAE could soon be on the move. Bollinger bands have tightened up, we have today flirted with the lower band and 38% retracement level - Which way will it go?
I like the momentum divergence coupled with the Stochastic entering the lower bound - this has compelled me to take a position, albeit with a tight stop given the potential for further retracement. Target will be the gap formed earlier this year, around the 580p level. This target will require the strong trend line to be overcome, but with results due late February perhaps the momentum will gather to break this resistance.

Another, perhaps more speculative, angle is to consider the wave structure of recent years. The most recent low could mark the final wave of a classic 5-down - this, in theory, should then be followed by a 3 wave corrective ABC structure.