Opportunity to trade 3rd of 3rd by selling $17.75 to 16.36
Big picture:
• market is correcting complete 5 waves started in May
• First corrective wave A has 5 wave structure therefore zig-zag form of the correction structure is the most appropriate here, also taking explosive structure of the up-trend and in particular wave 5, which should be corrected in full as per Elliott Wave standards.
• Corrective A and B waves seems complete and
• Wave C is developing with target zone ~$16.36.
1.272x extension of wave A from the top of B : 18.687 -1.272*(19.6472- 17.7834) = 16.32
But 16.34 is a level of 0.6118 correction of the previous 5 wave move and also it is a strong support-resistance level from the previous price action. Therefore, I would prefer to close short position prior to that level.
I personally found 1.272x extension to be more frequent than a standard 1x, which could be considered as conservative target ~$16.82
Closer look at wave C:
• Wave C of zig-zag should have a 5 wave structure.
• Wave 1 (green marking) is complete.
• Wave 2 is complete too. Even though it has corrected only ~25% of wave 1, it has a nice duration matching duration of wave 1, i.e. looks perfectly balanced.
• So wave 3 is underway.
Closer look at wave 3 of C:
• First wave i (yellow marking) has nice 5 wave structure so it seems perfectly complete
• Wave ii of (iii) is underway. I believe it will complete at $17.75 which is 0.618x level of correction of wave i and also good support-resistance level from the previous price action. So it is a good level to sell for riding wave iii of (iii).
• market is correcting complete 5 waves started in May
• First corrective wave A has 5 wave structure therefore zig-zag form of the correction structure is the most appropriate here, also taking explosive structure of the up-trend and in particular wave 5, which should be corrected in full as per Elliott Wave standards.
• Corrective A and B waves seems complete and
• Wave C is developing with target zone ~$16.36.
1.272x extension of wave A from the top of B : 18.687 -1.272*(19.6472- 17.7834) = 16.32
But 16.34 is a level of 0.6118 correction of the previous 5 wave move and also it is a strong support-resistance level from the previous price action. Therefore, I would prefer to close short position prior to that level.
I personally found 1.272x extension to be more frequent than a standard 1x, which could be considered as conservative target ~$16.82
Closer look at wave C:
• Wave C of zig-zag should have a 5 wave structure.
• Wave 1 (green marking) is complete.
• Wave 2 is complete too. Even though it has corrected only ~25% of wave 1, it has a nice duration matching duration of wave 1, i.e. looks perfectly balanced.
• So wave 3 is underway.
Closer look at wave 3 of C:
• First wave i (yellow marking) has nice 5 wave structure so it seems perfectly complete
• Wave ii of (iii) is underway. I believe it will complete at $17.75 which is 0.618x level of correction of wave i and also good support-resistance level from the previous price action. So it is a good level to sell for riding wave iii of (iii).
