This post is to demonstrate a variety of trading techniques and relationships amongst similar patterns. Although this is focused on RYCEY, I provide reference to RTX as a representation of airline engine manufacturing and reference the 2018 BTC consolidation.
Lately I've been studying the Wyckoff Distribution and found eerie similarities that are worth sharing.
2018 BTC Comparison of Wyckoff Distribution Take a look at the 2018 BTC consolidation. We have clean Wyckoff distribution with the absence of the Spring since there was a lot of buying pressure to turn the market around.
Moving Average Strategy Although we typically look for a Spring inflexion point to mark the end of accumulation, sometimes it just isn't there. The similarity between the daily 50ema and 100ema is what leads me to be inclined to bet that we won't have a Spring this time. Notice how we are pinched right between them and they are near crossing?
Eliot Wave Interpretation Almost everyone watching RYCEY is aware of the 94% discount off ATH's and we are no where near pre-pandemic levels. In this chart, I've combined Eliot Wave principles to show completion of the ABC correction with subdivision of wave C - we have wave 1-2 extension landing right at the 2.272 which is what we look for for wave 5 completions.
Wyckoff Interpretation In addition, the Wyckoff interpretation demands that you pay attention to volume! Look at this huge uptick in volume from the end of last year when the dividend was cut, and it still remains relatively high to this day. These are never before seen levels of volume with relatively no price movement since the big drop down into the $1 range. All of this hints that Rolls Royce is ready for a huge turnaround. My first target is $3.
Using Competitors as a Proxy As initially mentioned, we are still looking to finish wave 3 for RTX which I am using as a proxy for RYCEY and the larger airline industry. Another leg up could correspond with a breakout of RYCEY and consolidation above the breakout zone as RTX pulls back for a wave 4. You can find that idea posted below in the related ideas.
We clearly did not bounce up as anticipated. Instead we are looking for a spring.
Note the major TL resistance on the downtrend that we have been dancing with. It's possibly we come back down, break the $1.31 low and backtest this TL
Comment
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The problem with this post is it did not consider change in marketcap back in 2020.
For this reason I reverted to using RR. as the primary ticker. The Wyckoff distribution is really clear on this chart.
Thank you very much for your works. I have positions too. The last couple days has been quite nervous for me. Hopefully next month will be a good month for RYCEY
jojotrading
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Also check out 1D chart with 244 sma
warrenbudget
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@jojotrading, tbh no idea what the 244 sma is showing and never heard of the 244 being used. Is that supposed to be representative of 1 year of trading days?
DeadCatCapital
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accumulation
warrenbudget
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@DeadCatCapital, normally you would look for a pierce down to mark the end of accumulation but the similarities to the BTC PA makes me think a spring may not be present. I am positioned with more cash on hand in case accumulation is still occurring.