NVDA has started a rally from the latest low and brought hope for bulls.
This rally resembles 5 legs impulsive waves and MAY be a very strong Bull Trap !
Inverted flat corrections are one of the most complicated patterns in bear market. Two pictures inserted in the chart are captured from a very useful book written by Frost and Prechter titled : "Elliott wave principle key to market behavior " chapter 1, figures 1.35, 1.36, 1.37,1.40 and 1.41. Figure 1.37 shows a real example of this tempting wave pattern and major decline after completion of pattern in Dow Jones Industrial Average from Aug to Nov 1973.
The key to recognize this pattern is to recognize internal pattern of previous waves. I showed internal wave patterns of previous waves for NVDA and as you see it is very similar to text book examples.
I showed two strong resistance zones which can resist against NVDA rally and push it back down to a new low if this analysis becomes true.
These resistance zones are related to different inverted flat correction patterns : Irregular and Running. Although there are some clues for recognizing which pattern is developing before the fact by means of Fibonnaci ratios, I prefer to be conservative and take both of them into consideration for now.
Please note, we are in the world of possibilities not certainties and the scenario I suggested here is a real possibility. I do not claim that this scenario surely happens but I can confidently warn traders and investor to keep this pattern in their mind .
Good luck everybody.
Comment
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We accurately recognized the bull trap. Inverted flats in bear market are very strong traps. Congrats my friends.
Lots of profit on the way up if you sell at the right time, so I guess it depends on how you look at it. Your market timing may have been off quite a bit but in reality who cares? Final result is down with the overall trend.
SaeedSajedi
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@lauralea, You are right. Lets follow and see what happens. You are also right about timing. In fact accurate timing cannot be done by price tools. It need its own tools. Even time fibonacci is not so accurate. I am learning timing tools these days. Thanks.
oliverrathbun
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Doesn't get much better than this! Good Job Saeed
SaeedSajedi
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@oliverrathbun, Thanks my friend. Thanks for kind words.🤗🤗
oliverrathbun
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I emphatically love this pattern... my favorite...great short set-up...well defined risk. Probably has a little bit of work to do to the upside... I'm on it. Thanks for the post, I hadn't been tracking NVDA lately.
SaeedSajedi
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@oliverrathbun, You are welcome and thanks for the comment.🤗