Wave 1 is the start of a bullish trend, it is SUPER hard to catch, usually everyone is pessimistic on the stock and nobody believes the move that its making.
Wave 2. where we currently are and possibly just finished.... usually has lower volume than wave 1, The price usually does NOT go below 0.618 fib retracement line (which we haven't) :), however sometimes but rarely it does.... The price usually falls in an ABC type of wave, which we currently saw last week. Phase 2 is where the shorts try to take over, the bears eat away at the ones scared to hold onto profits as we attempt to retest phase 1 lows. If you follow charts we ALWAYS retrace and test an old resistance like where we fail and drop harder, or buyers come in and we make the previous resistance a new support.
wave 3 THE EXCITING WAVE!!!!!!!! Usually the most POWERFUL and largest wave in a trend. (some would argue wave 5 is, but not necessarily true... Wave 3 - the news is now POSITIVE and fundamental analysts start to raise earnings targets and estimates.... *prices rise quickly and corrections are short lived. Anyone looking to get in on a pullback will likely "miss the boat" Wave 3 OFTEN extends wave 1 by a target ratio of 1.618 aka the GOLDEN POCKET!
Wave 2. where we currently are and possibly just finished.... usually has lower volume than wave 1, The price usually does NOT go below 0.618 fib retracement line (which we haven't) :), however sometimes but rarely it does.... The price usually falls in an ABC type of wave, which we currently saw last week. Phase 2 is where the shorts try to take over, the bears eat away at the ones scared to hold onto profits as we attempt to retest phase 1 lows. If you follow charts we ALWAYS retrace and test an old resistance like where we fail and drop harder, or buyers come in and we make the previous resistance a new support.
wave 3 THE EXCITING WAVE!!!!!!!! Usually the most POWERFUL and largest wave in a trend. (some would argue wave 5 is, but not necessarily true... Wave 3 - the news is now POSITIVE and fundamental analysts start to raise earnings targets and estimates.... *prices rise quickly and corrections are short lived. Anyone looking to get in on a pullback will likely "miss the boat" Wave 3 OFTEN extends wave 1 by a target ratio of 1.618 aka the GOLDEN POCKET!