LiveChat obviously is in a long-term upwards trend.
Since July '21, we can experience a mid-term downward trend, which we should treat as a correction.
This correction in a three-wave movement reached significant levels:
1. A 1:1 area (making wave 4 a range 100% - 127.2% of wave 2),
2. Fibo .382 - .414 of wave 3 (typical for wave 4),
3. Fibo .382 - .414 of all time
4. In the structure of wave 4, A = C
5. RSI on a daily chart below 30, and close to 30 on the weekly chart
With the strongest technical area sitting around 1.272 of wave 2 (smaller green area on the chart), and the support from previous lows, the price range from 97.0 zł to 94.4 zł was a great place to finish the correction and start wave 5 with the target at the ATH.
Negation of this long trade and proceeding with a bigger correction can be achieved in three steps (one of them already made):
1. Touching the 1.414 level of wave 2 (achieved)
2. Making a new lower low below 89.5 zł
3. Closing a daily candle below the 89.5 zł level
If this happens, wave 4 can be deeper (with an invalidation point of being wave 4 when reaching the top of wave 1). Also, it may be possible to put a finished wave 1 at the current ATH, the downward movement may be considered as a building impulse wave (with all moves up being a correction with a possibility to escape from long positions) to finish wave A (of wave 2) in lower parts of the chart.
However, level 1.414 was the place where lots of stop losses might be placed by traders longing from the one-to-one area. By reaching it, smart money could trigger the sell-off just to buy more without making a lower low and keep pushing up. If that’s true, what I'd like to see from this price point in the short-term is smart money stepping in and:
1. Creating a morning star on a daily chart (achieved)
2. Creating a bullish pin bar on a weekly chart
3. Making a successful formation test on a weekly chart
Since July '21, we can experience a mid-term downward trend, which we should treat as a correction.
This correction in a three-wave movement reached significant levels:
1. A 1:1 area (making wave 4 a range 100% - 127.2% of wave 2),
2. Fibo .382 - .414 of wave 3 (typical for wave 4),
3. Fibo .382 - .414 of all time
4. In the structure of wave 4, A = C
5. RSI on a daily chart below 30, and close to 30 on the weekly chart
With the strongest technical area sitting around 1.272 of wave 2 (smaller green area on the chart), and the support from previous lows, the price range from 97.0 zł to 94.4 zł was a great place to finish the correction and start wave 5 with the target at the ATH.
Negation of this long trade and proceeding with a bigger correction can be achieved in three steps (one of them already made):
1. Touching the 1.414 level of wave 2 (achieved)
2. Making a new lower low below 89.5 zł
3. Closing a daily candle below the 89.5 zł level
If this happens, wave 4 can be deeper (with an invalidation point of being wave 4 when reaching the top of wave 1). Also, it may be possible to put a finished wave 1 at the current ATH, the downward movement may be considered as a building impulse wave (with all moves up being a correction with a possibility to escape from long positions) to finish wave A (of wave 2) in lower parts of the chart.
However, level 1.414 was the place where lots of stop losses might be placed by traders longing from the one-to-one area. By reaching it, smart money could trigger the sell-off just to buy more without making a lower low and keep pushing up. If that’s true, what I'd like to see from this price point in the short-term is smart money stepping in and:
1. Creating a morning star on a daily chart (achieved)
2. Creating a bullish pin bar on a weekly chart
3. Making a successful formation test on a weekly chart
