Mega running triangle in the making
I inadvertently stumbled upon the chart of IBM last night and I was intrigued with the pattern that has developed over the past thirty plus years since 1999 (the dot.com crisis).
Economists and market analysts have been talking about the US economy undergoing a recession of late because of the interest rate hike and the sticky inflation, with the US stock market showing signs of bearishness.
I am not on the side of the bearish camp and I believe that we are currently undergoing a correction which will end in the foreseeable future. The financial stocks are a good harbinger for the US economy and I believe the correction of the financial stocks is going to end soon. I have been using goldman sachs as a proxy. I will post my analysis of GS when the right opportunity arises.
Back to IBM. I reckon it is on the path of completing the wave E of the 'mega' running triangle that has developed over the 34 years as depicted on the weekly chart. Let me expound on it.
Wave A : W -X - Y formation. W is a flat, followed by X, and Y is a zigzgg.
Wave B : The longest wave in the triangle that explains why we are getting a running triangle. I will breakdown wave B into a W-X-Y formation. Wave W is a abc pattern. I will label this as a elongated flat. 'a' wave is a leading diagonal follow by a steep descent, wave b, and a five waves 'c' wave. Wave X is a regular flat pattern followed by Wave Y, a triangle. It may be difficult to see the triangle legibly on the weekly chart, but can be viewed visibly on the daily chart. Wave B is labelled as a double combination wave. Elongated flat (W)-(X)-triangle (Y).
Wave C : It is a classic zigzig abc pattern. 'a' wave is a five wave impulse pattern with third wave extension. 'c' wave is a expanding ending diagonal.
Wave D : It has sufficient waves to label it as a W-X-Y pattern, but corrective waves are tricky. A decisive breakdown below 125 will give a good indication that wave D is completed and that we are on the path to wave E
Wave A, B,C and D ( white label) are all but corrective three waves. Once wave E is completed in the region of 100. IBM will be riding on its impulse wave C (orange label) to a new high. IMHO.
Economists and market analysts have been talking about the US economy undergoing a recession of late because of the interest rate hike and the sticky inflation, with the US stock market showing signs of bearishness.
I am not on the side of the bearish camp and I believe that we are currently undergoing a correction which will end in the foreseeable future. The financial stocks are a good harbinger for the US economy and I believe the correction of the financial stocks is going to end soon. I have been using goldman sachs as a proxy. I will post my analysis of GS when the right opportunity arises.
Back to IBM. I reckon it is on the path of completing the wave E of the 'mega' running triangle that has developed over the 34 years as depicted on the weekly chart. Let me expound on it.
Wave A : W -X - Y formation. W is a flat, followed by X, and Y is a zigzgg.
Wave B : The longest wave in the triangle that explains why we are getting a running triangle. I will breakdown wave B into a W-X-Y formation. Wave W is a abc pattern. I will label this as a elongated flat. 'a' wave is a leading diagonal follow by a steep descent, wave b, and a five waves 'c' wave. Wave X is a regular flat pattern followed by Wave Y, a triangle. It may be difficult to see the triangle legibly on the weekly chart, but can be viewed visibly on the daily chart. Wave B is labelled as a double combination wave. Elongated flat (W)-(X)-triangle (Y).
Wave C : It is a classic zigzig abc pattern. 'a' wave is a five wave impulse pattern with third wave extension. 'c' wave is a expanding ending diagonal.
Wave D : It has sufficient waves to label it as a W-X-Y pattern, but corrective waves are tricky. A decisive breakdown below 125 will give a good indication that wave D is completed and that we are on the path to wave E
Wave A, B,C and D ( white label) are all but corrective three waves. Once wave E is completed in the region of 100. IBM will be riding on its impulse wave C (orange label) to a new high. IMHO.