This is one that i've been watching for a while now. Im going to look at this price action using 3 different methods: Elliot Waves, Pitchforks, and Volume Profile (with some anchored VWAP and MA action)
Based on the EW analysis, we are in an intermediate wave 3 (yellow) of primary wave 3 (green) of cycle wave 3 (white), giving us a triple nest.
If you look at the modified Schiff pitchfork, we got rejected off the median during the Sept 17 high, found support at the 1.618 line and are now holding that support.
On the Volume profile, we got rejected off the high volume node (which coincides with the median line of the pitchfork and the wave 1 top from EWT) and are now consolidating off of another large high vol node, and sitting right underneath the POC line (red dashed), having bumped up against it several times now.
If you take the YTD Anchored VWAP, we are also sitting right on top of it, and right underneath the 200 SMA creating a pinch point.
If we get above 25.50-26, we will clear the volume node leaving us wide open to hit the previous high of 28-29, and clearing that, all the way to 40.
If we do break the 1.618 pitchfork support, we could fall to the 2 line, and test the bottom of the current volume node around 22.90, giving us a double bottom pattern at the previous resistance turned support level.
I think it's going down because to me your W-X-Y looks more like an impulse (wave A) with a perfect triangle in wave 4. So it may be the start of a bearish wave 3..
ir-rizzle
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@tfargo, thanks for the alternative view!
The WXY could be an impulsive A wave, with the Sept 17 high as the wave B top. The problem i have with that count however is that B doesn't hit any clean fib levels at the top (connecting top of impulsive A with bottom, the B top lands half way between the 38.2 and the 0.5), and the C leg would then have to go past the 0 line (at 17.13) and the next closest fib (the -14.6) extension is ~13....that seems unreasonably low to me without some substantive bad news to precipitate it. And if it just hits the 0 line, then we just have a double bottom which is still bullish in the long term.
Plus, if you take into account that wave A takes 104 days, and wave B takes 129 days, even giving wave C 100d, we end up at EoY to hit that wave C shortened bottom with a move up to 25/26 to finish w4 of Leg C before w5 down to 17 or 13. All of this would need to happen in an environment where other growth stocks are leading. To me growth names all have a very similar W4 going into W5 look on the daily/weekly charts, so it would have to buck the trend in order to move that far down.
It's certainly a possible path, but a low probability one based on what im seeing.
DonSatoshi
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@ir-rizzle, Great job in explaining your view, I appreciate it.