Long

C3.ai ($AI) finishing another prolonged sideways correction?

Updated

Could very well be done here already with the orange count or could provide at least another low with the yellow count.

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Honestly, not that much has changed. The impulse I proposed above could be done and the low might be in. It might just as well not be done yet and the impulse counted slightly different could leave room for another low.

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Quite the drop there...

So far the count proposed in the last update fits, though the 5 doesn't necessarily have to be in already - could play out as a diag until earnings:

Vegas wave on the daily:

Alternatives to consider:

I Pretty similar to the count to the left:

II An expanding diag, which could be counted as 3s or 5s in the actionary waves:

III A contracting diag:

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Not everything that looks the same, has to play out the same. That being said, here are some similarities between where we are now and the May low on higher timeframes looking at the RSI at Momentum indicators.

Weekly:

Declining volume towards the low, RSI around 50, Momentum trying to stay positive.

3D:

Noticeable hidden bullish divergence on RSI, Momentum trying to turn positive around zero.

Daily:

RSI hidden bullish divergence again, Momentum possibly turning at a similar lowpoint.

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Not looking great in premarket.

If the low breaks, it still leaves this previously shown possibility for the 1-2 1-2:

Alternatively, we'd still have this previously shown variation which had a contracting diag finishing at the high

Shown here are two possibilities for a correction in that case. Yellow would be a completed Multizigzag. Orange would be a diag as an A-wave, with a B- and C-wave yet to come.

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We have arrived at the point of interest for this variant (see first image of last update for more detailed count):

Lower timeframe, it's not exactly pretty, but it seems to work:

Difficult to have very high conviction at this point, but it's a possibility.

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Maybe one more low for an ending diag to finish.

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Well, that was the absolute minimum for a slightly new low, but it works with the diag shown in the previous update:

Leaves the question, if that was a second major sideways wave 2 (see first image in the Sep 27 update), which would be extremely bullish

or if that was a higher degree diag to the downside (see last image in the Sep 7 update), which would suggest the following upwards move as a corrective before going lower.

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Without getting too lost in the micro, I could count the move from the low as a diag (orange), an impulse (yellow) or a zigzag (red), so that's not too helpful.

Should the Zigzag correction (blue) be right, it's ultimately just a question if the low holds or not.

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And should the low be taken out, there's still a way to count the proposed diag C wave down differently:

This count would be valid until around 20.80 $

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Been a while since I updated this. The count from the last update seems to have stuck, again with just a minimal new low...

I don't have a clear favorite yet for the move from the low so far, but here are some possibilities:

1. A diag with a slightly truncated wave 5 - in this case we're correcting and likely not yet done.

2. Most bullish case of a 1-2 1-2 with a flat correction. I would want to see this start moving rather soon then.

3. Can't really exclude a 3-wave move here, which could be part of a lot of things :/

So EW aside, here are some levels I've got on my chart:

The 28.5 level shows some relevance. A sustained drop below 27.5 would likely lead to sub 26 again.

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Basically went as expected for the case of a loss of the shown levels in the last image of the previous update.

28.5 held multiple times since the last update and a loss of 27.5 gave us sub 26 as predicted, just that it all happened in one go after earnings.

It's not a coincidence that I had nothing much on the chart between 25.8 and 28.5. On the 1h there were just two wicks below that 25.8 level, other than that it held perfectly and afterwards it again went straight up to that magical 28.5 level, which until flipped should be considered resistance for the time being.

For the bullish bias I can still only see the diag with a truncated fifth wave, which isn't exactly the prettiest thing (or a 3-wave move as part of a bigger diag, but there's too many contrary possibilities in case of a 3-wave move to fixate on that).

As for the bear, one could start arguing impulses down here:

The contracting diag A wave down (second image Sep 7th update) is also still on the table and would suggest a new low.

So, like in the last update, EW isn't giving anything too clear here. Other than that we're still in the same range as before, so the levels on the chart I have here I've shared already.

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Just a small update.

As mentioned 28.5 worked as resistance for a 50% pullback. Now clearly broken above and made a new high.

The new high at least made some of the more bearish possibilities previously shown less likely. If this move turns into a bigger impulse, it would give the truncated diag more credibility:

In orange would be the case of another 1-2 first, which looks like it would still be missing a wave 5.

Staying with 3 wave moves, it could just as well turn into a bigger diag.

So still no obvious ones at this point for me. It's not always useful to go too deep down to find a count anyway. As long as the previously anticipated low holds (compare the October updates), there's a case to be made for upside.

For the time being, again some levels on my chart:

This will probably be my last update for the year here, so enjoy the holidays!

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One more thing, since it's containing the movement so nicely:

A break of the pitchfork to the upside would be nice for the bulls.

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Just a small repost of the previously shown levels, which again clearly showed relevance:

Hit that 33.60$ level and turned hard to close the gap around that 28.5$ level again.

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The bulls would like this count and would want to see that low hold. For now we hit that 28.5$ again

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Really not much new to say here, other than pointing out zones above and below:

So far all we've done is testing and once more holding the green zone.

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That 28.5$, one way or another, am I right?

Anyway, zones shown in the previous update, a hold here and something along the green path would look nice for an impulse finish.

A break and another test of the lower zone for the blue path could be seen as a 1-2 1-2.

Still, not that clear a picture at this point.

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Blue path from the previous update hit it pretty well:

Now for the bullish view, we could be either in a wave 3 with two to three 4-5s missing (green path) or we could have an expanding leading diag from the 23.60$ low, which still could have another high missing before a correction, which could go deeper and maybe hit that 28.5$ level again (orange path):

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This time orange hit it pretty well:

If we are correcting an expanding (leading) diag a deep correction is to be expected. While we have already reached enough depth, even revisiting the lows here wouldn't be surprising.

That being said, the possibility for the larger corrective shouldn't be ignored:

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Green earnings, move on volume to a local high, this must be it, right?

Well, maybe not. Look to the left, last earnings same effect and what followed was a move to a new low - does it have to do the same thing again? Of course not, just saying that this isn't quite enough yet to be fully convincing:

So far we generally just followed the red path from the last update 2 months ago; nothing really changed as far as this count goes:

So that's still very much on the table for the more immediate bear case.

If you want to be bullish though, you could argue a contracting diag wave A instead of a ZigZag, which would work as a finished count with the last low:

We are sitting right at the 50% retracement level, right under the VWAP from the all time low and right at a price level where more upside got denied in the past (Feb/Mar 23):

So it depends on how it will continue from here. Get above 30$ and stay there (wicks don't count) and the red path becomes less likely, otherwise sub 20$ is still very much possible.

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Red path from the last update (first shown in march) was pretty spot on and the sub 20$ were delivered, followed by a 50% move at this point:

The proposed WXY correction seems done - if it doesn't want to add another XZ, that is.

We're currently sitting around the macro POC again:

so it remains to be seen if this one will be gained and held.

Same thing for the shorter time frame count - could be many things, so the move has to finish to have a clearer view:

Alternative impulse count for an earlier finish:

TophatPandaMagician

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