Burberry may turn around soon? EW sequence
Updated
Burberry (ticker: BRBY) reaching ~14 years lows, where the risk /reward ratio for the mid/long term starting to be favourable. I have two scenarios sketched out on the weekly, white being a 5 wave up, in which we finished 3, followed by a yet unfinished irregular flat structure as a wave 4. Yellow suggests a 3 count move up as an (A) wave, working now on the (B) wave, and later (likely several years) a (C) would follow in 5 subwaves.
In yellow I would primarly expect a deeper cut in the (B) wave also as an ABC structure, where we likely nearing the A wave bottom in the foreseable future.
In both scenario a move-up should be imminent, white to start the wave (5) to the upside, and for the yellow it would be the B wave. For the yellow I put there the resistance levels, but be aware, as price cuts deeper (IF), then we need to adjust that red resistance fib box.
Now, the movedown already consist 5 waves, so technicly we could be near to the local lows, and also in support already (hence the post). Next levels to watch: 951, 885, and 834 and 768 as bigger fib support levels.
Weekly RSI is oversold despite MACD is weakening, On the daily we are building divergence already, so far all the meaningful MA's (9/21/50-52) currently rejecting price action, and far below the 200day MA.
In yellow I would primarly expect a deeper cut in the (B) wave also as an ABC structure, where we likely nearing the A wave bottom in the foreseable future.
In both scenario a move-up should be imminent, white to start the wave (5) to the upside, and for the yellow it would be the B wave. For the yellow I put there the resistance levels, but be aware, as price cuts deeper (IF), then we need to adjust that red resistance fib box.
Now, the movedown already consist 5 waves, so technicly we could be near to the local lows, and also in support already (hence the post). Next levels to watch: 951, 885, and 834 and 768 as bigger fib support levels.
Weekly RSI is oversold despite MACD is weakening, On the daily we are building divergence already, so far all the meaningful MA's (9/21/50-52) currently rejecting price action, and far below the 200day MA.
Note
Price fell further as expected, the downside sequence can be counted as technicly full, or nearly full. I can imagine one or two more swindown, since so far there is no 5 wave upstructure in the smaller timeframes.Primarly I would watch 834 levels, secondarly 765 levels.
Let it be the start of the big white wave (5) OR just a yellow B wave correction, a moveup should be imminent.
Risk-reward is starting to get good, start to scaling in carefully could be reasonable at theese levels. For that (because many people DM-ing me how to scale in) a triangulation method could be a good one (chop off the investment, and add in as price drops to your defined levels, bottom heavy)
Note
Either we are getting an extended wave (v) for the white, or as an abc, with a very shallow b wave.For me this movedown now seems unfinished due to the extension; not a problem, getting down to the lower support fib levels. I have sketched out a possible route; as long as we do not have a 5 waves up breaking above first dotted white trendline, there is no clear bottoming signal.
It is reasonable now to expect either one (diagonal) or two (impulse) swingdown now to technicly complete the sequence.
Smaller fib levels to watch where price could react:
690; 661
Bigger fib levels (one overlap, nice confluence with a small one as well): 630; 606, 587.
Below that, it could happen the yellow is unfolding in a more direct downside way; although thats not the primary "expectation", a higher yellow B wave running into resistance at least would be reasonable.
Note
As expected, price fell further, now reaching the 300% extension of white wave (3). So far i count the price actions as a running flat for wave (4) which is finished and now working on white wave (5) to finish off wave iii. First indication that we are working on wave iv would be to break above the blue-ish dotted trendline in a sustained way, resistance already added.
For my eyes the wave iii however still seems unfinished, BUT on the 1hr/4hr chart bullish divergence is already present, on the daily not yet or not convincing yet - likely under formation. I could count in a different way as well where we already in wave v down, BUT thats less likely.
so far 9/21 day SMA&EMA rejecting price action, others (50/52/180/200) are way above us.
Note
Bullish divergence played out essentially, technicly I can count the white sequence down as full, i put there as an ALT for the possible bottom. Be aware, we CAN still go further down either as per the white for the last fifth wave OR as per the yellow for big A down to get finished.
Now, so far we have only 3 waves up from the bottom, which is not good enough, but could be a diagonal for a bullish scenario, but no confirmation so far. What we need to have is to break above the small red box now sustained, preferably in a 5 wave move, even better to break above the small yellow box, and the falling dotted trendline.
Note
Very nice runup, as the idea suggests. Whoever bought on the marked targets, already over 50% up! Congrats to all!
Now, so far this is still a 3 wave up - which is not suprising if its an overall diagonal - sure enough it can expand to a 5 wave up (that would be preferable) - for that the smaller yellow fib box must hold. Otherwise the bigger should hold, great places to scale in for whoever missed the previous runup. (marked ALT white scenario).
We might get a dip below sure enough the box - I tend to think in that case due to the structure, its just the last wave 5 within C expanding to the downside - likely even better place to scale in - so leave enough "gunpowder" so to speak.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.