Elliott Waves: Natural Gas case study

Feb 8

Overview:
Since the significant bottom in June 2020, Natural Gas embarked on a compelling journey, forming a fresh impulse that concluded around the highs of August 2022 as Wave I in the Cycle Degree. The subsequent phase witnessed a corrective move, labeled as Wave II on the weekly timeframe, comprising three subdivisions: ((A)), ((B)), and ((C)). The current focus is on the ongoing Wave ((C)) on the Daily timeframe, expected to unfold in five subdivisions: (1), (2), (3), (4), and (5). Within this framework, Wave (1) to (4) are complete, and attention now turns to the unfolding of Wave (5) on the Four-Hourly timeframe.

Current Structure:
On the Four-Hourly timeframe, Natural Gas is in the process of forming Wave (5), consisting of Wave 1, 2, and the ongoing development of Wave 3. The details of Wave 3 are further observed on the Hourly timeframe as finished wave ((i)) & ((ii)) and now possibly we are unfolding Wave ((iii)) of 3 of (5) of ((C)) of II.

Elliott Wave Principles:

Corrective Structure:
Wave II is corrective, manifesting as a complex correction with three subdivisions, labeled ((A)), ((B)), and ((C)).

Impulse Formation:
The primary upward movement from June 2020 to August 2022 represents an impulse, characterized by a sequence of five waves.

Subdivision Details:
Each wave and subdivision unfolds according to Elliott Wave principles, maintaining the structural integrity of the overall pattern.

Learning Points:

Analyzing Market Cycles:
Elliott Wave Analysis serves as a valuable tool for understanding the cyclical nature of markets, providing insights into the psychology of both buyers and sellers.

Trend Anticipation:
Corrective waves within the Elliott Wave framework offer a strategic opportunity to foresee potential trends—whether they signify a resumption or reversal of the existing trend.
Elliott Wave Analysis is a tool to decipher market cycles, offering insights into the psychological dynamics of buyers and sellers.

Corrective waves provide an opportunity to anticipate trend resumption or reversal.
The principle of non-overlapping waves helps identify the structure of the market move.

Validation and Risk Management:

The integrity of this Elliott Wave structure is contingent on Wave II not surpassing the low of Wave I, identified at $1.440. A breach of this level would invalidate the current wave count.

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RK💕

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The analysis and discussion provided on in.tradingview.com/u/RK_Charts/ is intended for educational purposes only and should not be relied upon for trading decisions. RK_Charts is not an investment adviser and the information provided here should not be taken as professional investment advice. Before buying or selling any investments, securities, or precious metals, it is recommended that you conduct your own due diligence. RK_Charts does not share in your profits and will not take responsibility for any losses you may incur. So Please Consult your financial advisor before trading or investing.