Could be 69'400 be the last ATH before correction?
Hi all, Here is my analysis using elliot waves.
According to the law of physics: "Every action generates a reaction", the same applies to the financial markets. A price movement (up or down) must be followed by a movement in the opposite direction. "What goes up must come down again. " (And vice versa)
In my last analysis I assumed that wave 5 was already completed, but now the picture is different. I Have now 2 different scenarios in mind:
Scenario 1:
It looks now that wave 5 of a superior wave 1 is still ongoing and forming an ending diagonal triangle (EDT). If we extend the upper dynamic resistance line (purple) of the EDT to point 3, you can also see that we are in a rising wedge pattern. Both are reversal patterns.
To determine the ultimate goal of wave 5, I pulled a trend based Fib extension from point 1 to 3. A likely goal for wave 5 is 0.618x the total length of waves 1-3. As we can see in my analysis, on around April 24th, the 0.618 intersects with the upper line of the EDT. I would then interpret this as the start of a trend reversal if it gets rejected there, which is then confirmed when the lower line of the EDT is broken.
This would mark the end of wave 5 and end of the superior wave 1 in this year. Therefore a correction wave 2 will follow which might have a big impact.
Wave 2 corrects at least 20% and less than 61.8% of wave 1. 50% is usual. And as we can see from the volume profile, this is where the strongest support can be seen. (34’000)
So, all 3 Zones in my graph are possible target for a drop before changing trend and to superior wave 3.
Zone 1 will most likely get support of 20 MA (weekly)
Zone 2 will most likely get support of 50 MA (weekly)
Scenario 2:
We are in a wave 3 and not wave 1. Wave 1 of this superior trend would have started back in October. Therefore this actual wave could be wave 5 of the superior extended wave 3. Therefore a wave 4 will follow. Like in scenario 1 wave 5 is also still in an EDT also pointing to reversal.
Wave 4 usually corrects no more than 50% of wave 3 and
often reaches the level of sub-wave 4 of wave 3
The zone where it could drop is from 43-000 to 34’000 (Zone 2 in my graph) before changing trend and to superior wave 5.
Conclusion:
It remains thrilling. Both scenarios point to a trend reversal. If the ending diagonal triangle pattern continues to take shape and is confirmed, I expect at least 2-3 weeks of red candles on the weekly chart from beginning from last week of April.
I have also a 3rd scenario in mind where 3rd wave is much more extended and with a short term bullish outcome. I will publish it as soon as my analysis is done.
(As always no financial advice)
According to the law of physics: "Every action generates a reaction", the same applies to the financial markets. A price movement (up or down) must be followed by a movement in the opposite direction. "What goes up must come down again. " (And vice versa)
In my last analysis I assumed that wave 5 was already completed, but now the picture is different. I Have now 2 different scenarios in mind:
Scenario 1:
It looks now that wave 5 of a superior wave 1 is still ongoing and forming an ending diagonal triangle (EDT). If we extend the upper dynamic resistance line (purple) of the EDT to point 3, you can also see that we are in a rising wedge pattern. Both are reversal patterns.
To determine the ultimate goal of wave 5, I pulled a trend based Fib extension from point 1 to 3. A likely goal for wave 5 is 0.618x the total length of waves 1-3. As we can see in my analysis, on around April 24th, the 0.618 intersects with the upper line of the EDT. I would then interpret this as the start of a trend reversal if it gets rejected there, which is then confirmed when the lower line of the EDT is broken.
This would mark the end of wave 5 and end of the superior wave 1 in this year. Therefore a correction wave 2 will follow which might have a big impact.
Wave 2 corrects at least 20% and less than 61.8% of wave 1. 50% is usual. And as we can see from the volume profile, this is where the strongest support can be seen. (34’000)
So, all 3 Zones in my graph are possible target for a drop before changing trend and to superior wave 3.
Zone 1 will most likely get support of 20 MA (weekly)
Zone 2 will most likely get support of 50 MA (weekly)
Scenario 2:
We are in a wave 3 and not wave 1. Wave 1 of this superior trend would have started back in October. Therefore this actual wave could be wave 5 of the superior extended wave 3. Therefore a wave 4 will follow. Like in scenario 1 wave 5 is also still in an EDT also pointing to reversal.
Wave 4 usually corrects no more than 50% of wave 3 and
often reaches the level of sub-wave 4 of wave 3
The zone where it could drop is from 43-000 to 34’000 (Zone 2 in my graph) before changing trend and to superior wave 5.
Conclusion:
It remains thrilling. Both scenarios point to a trend reversal. If the ending diagonal triangle pattern continues to take shape and is confirmed, I expect at least 2-3 weeks of red candles on the weekly chart from beginning from last week of April.
I have also a 3rd scenario in mind where 3rd wave is much more extended and with a short term bullish outcome. I will publish it as soon as my analysis is done.
(As always no financial advice)