Elliott Wave Analysis: Dow Jones Is Forming The Wedge Pattern

TVC:DJI   Dow Jones Industrial Average Index
Hello traders and investors!

Today we will talk about Dow Jones Industrial, in which we see quite clear and very interesting formation. We are talking about an ending diagonal (wedge) pattern.

Well, DJI is rising, but as you can see, it's very slow, so it's obviously running out of steam, which we see it as part of an ending diagonal (wedge) pattern as part of wave 5 of a higher degree wave III.

An ending diagonal pattern is a type of pattern that can occur at the completion of a strong move. It reflects a “calming” of the market sentiment such that price still moves generally in the direction of the larger move, but not strongly enough to produce an impulsive wave. Ending diagonals consist of five waves, labeled 1-2-3-4-5, where each wave subdivides into three legs A-B-C. Waves 1 and 4 overlaps in price, while wave 3 can not be the shortest amongst waves 1, 3, and 5.

Respecting the price action and wave structure, seems like DJI is looking for another jump for wave C of (5) up to 35700 - 36000 area to complete that wedge pattern within a higher degree wave 5 of III and then watch out for a bigger and deeper correction within a higher degree wave IV that can send the price back to 33k support zone.

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