Hang Seng...Wave 4 endet this week?Hello Traders,
today I like to show you the Hang Seng Future (Current contract in front) to show you the wave structure.
On a daily timeframe, we still observe, that the close on April 17, high @ 24689 (intraday) and @ 24356 (closing), Hang Seng possibly finished a wave „4“ of Minor degree (the degree is not that important, let`s check the structure).
If this is the case, next week should be a down week, which will show the first waves of a wave „5“ to fresh new lows below the 20965 on March 19! This move should develop as a „five-down“!
If so to come and wave „5“ will evolve internally as wave 1 did, the time target for this wave is the week of May 4. If it will develop in terms of price as wave 1 did, it would be a „truncated“ wave! Because after an extended wave 3, waves 1 and 5 tends to be equal in terms of price movements. And according to R. N. Elliott, there is only one wave to extend during an impulse. But this is to early to judge.
So, within a „normal wave „5“ down, this move need to close below 20965 and it would extend to possibly the lower boundary (green) of the trend channel. A price target for this idea would not be serious at the moment, so I´d like to wait for more evidence of this idea.
Another count could be a „flat-pattern“ in progress.
In this case, the possible wave 1 would be a wave A, the wave 2 a B-wave and the decline underway a wave C. The only „problem“ I have with this count is the fact, that wave C is developing very long in terms of price and retrace more than a 1.618 Fib extension of wave A! In fact, in rare cases, it is allowed to do so, but this is a rarely seen extension. But still valid.
So, I judge this idea with one of the lower probability of both I described here. I just wanted to show you my „thoughts“ about possibilities.
While a wave 4 rule says, that it is not allowed to peak into the price territory of wave 1, this wave can move higher as to the 0.5 Fibonacci of wave 3. So the invalidation point for a wave 4 is at the peak low of wave 1 @ 25880!
We will see what`s next for HS and I will update the count if price and time move forward next week.
Have a great and safe week...
ruebennase
Feel free to ask or comment.
Trading this analysis is at your own risk!