So a follow up on NKLA this time on the 4hr after todays close. Things are starting to get interesting. Todays trading day was insane with alot of back and forth. Eventually price action heading down to 18.70 level before being wicked up. As you can see the price target below 19.10 was bought up due to it being in the Golden Ratio Zone at .618 FIB. Showing tremendous support and buying power. Closing today at $19.51.
Also note that after the bottoming around approx 13.30 level, it triggered a Elliot impulse to the upside followed by ABC correction which i believe printed the C wave bottom when we tried to go through the .618 FIB level ($19.10).
Now we are resting on a support level that has flipped support from resistance as noted with blue arrow icon. With extra protection currently at .618 fib level.
Currently there is tight action occurring with a formation of a pennant. Pennants are usually continuation patterns.
I've also added 50 day SMA, which if price action is above marks uptrend. I would like to add that a stronger case would have been made if daily candle closed above 19.60 price level. Showing strong support off the 50SMA. Currently it closed a little under.
There seems to also be some slight volume increase with last few 4hr candles compared to WAVE 3.
STOCH RSI also has bottomed to oversold territory, marks potential momentum to upside.
Ill be waiting for confirmation of the pennant formation with breakout and candle close outside above it.
Also descending trend line of pennant and the current support line can also be a potential descending triangle. Which could cause price action to test back inside of the bigger descending triangle (linked below)
I've also provided link to NKLA chart for a bigger picture on the daily. This chart coincides with the descending triangle that's been forming since blow off top in June 2020. Last 4 days we've been battling the resistance trend line. With volume the 4 hour Pennant play theoretically should have enough juice to battle it once more and potentially breakout. If so ill be taking major positions on confirmation of a breakout from descending triangle which would mean trend reversal to upside. Tight stop loss below first hypothetical closed candle wick.
1st target would be filling the gap at approx. $26
I wish everyone luck and please leave comments, advice and your insights below! THANKS.
Hey there, I'm just new to counting waves but I thought if a wave 4 crosses back into wave 1 it invalidates the impulsive wave.
SafofAllTrades
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@rottnpicks, Yes traditionally it shouldn't. But sometimes price action may not hold tradition. I dont have that much experience to go deeper into explanation. But what ive learned is that Its always important to watch confirmations and use more than one determining factor when jumping into a trade. For example Elliot wave with FIB retracement combo while determining where momentum is going. This setup ultimately played out the way i wanted. I guess sometimes theres some luck involved too :) lol.
rottnpicks
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@Saf_h,
thanks for that' I'm still learning. GL
SafofAllTrades
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@rottnpicks, Same here. You as well. This tbh made me review Elliot waves today. So thanks for that.
rottnpicks
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@Saf_h, You should watch some of rigorocks posts, he gives very thorough analysis in his videos. He will often give both bear and bull scenario. He did 2 videos on NKLA. You should watch his videos on these stocks...They are playing out as we speak and he has been dead on so far. AMRS, VISL, NKLA, he sets up low risk high reward position with a stop loss.
SafofAllTrades
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@rottnpicks, Hey, thanks. Ill be sure to take a look.
Chartguru1
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Great write up... news driven cult stock. Tick tock. If the factory built without delays, could be a winner