PFE STILL MORE GAS IN THE TANK
Updated
This chart has been fairly predictable for the past year, however as we start to shape up the larger degree wave count, I've decided to alter this from an expanding diagonal to a typical impulse.
The main thing shaping this is the action for wave 2 which appears to be a flat.
Under this premise, we have subdivision of wave 3 underway. It appears to be an expanded third: triggering the 1.618 with evidence of another leg up to the 2.272 at $56. This is the primary trade at hand, as we target 15-20% gains here. This trade presents a 10:1 RR with a SL around $45.50 at the recent low for a 20% target.
Wave 4 of 3 looks to be complete, hitting the 1.618 extension of A to B (see chart below). We have RSI testing the 70 which will be telling: if it can get into overbought territory, then it's indication of a trend reversal (as markets typically only go into overbought when bullish). Not pictured is the stacking bullish divergence for this wave 4. Another thing that stands out as evidence of wave 4 complete is that it was sharper than wave 2 of 3. By rule of alternation, we would expect this.
Upon hitting this target near $56, we will reevaluate, likely close, and look for the next wave down. For now, I have a $45 level identified (w4 larger count) and a 2.618 target near $60 (w5 larger count) on the map. Remember: for extended wave 3s that approach the 2.0, we look for the next fib level near 2.618 for w5. These future targets are dependent on what happens here in this wave 3.
The main thing shaping this is the action for wave 2 which appears to be a flat.
Under this premise, we have subdivision of wave 3 underway. It appears to be an expanded third: triggering the 1.618 with evidence of another leg up to the 2.272 at $56. This is the primary trade at hand, as we target 15-20% gains here. This trade presents a 10:1 RR with a SL around $45.50 at the recent low for a 20% target.
Wave 4 of 3 looks to be complete, hitting the 1.618 extension of A to B (see chart below). We have RSI testing the 70 which will be telling: if it can get into overbought territory, then it's indication of a trend reversal (as markets typically only go into overbought when bullish). Not pictured is the stacking bullish divergence for this wave 4. Another thing that stands out as evidence of wave 4 complete is that it was sharper than wave 2 of 3. By rule of alternation, we would expect this.
Upon hitting this target near $56, we will reevaluate, likely close, and look for the next wave down. For now, I have a $45 level identified (w4 larger count) and a 2.618 target near $60 (w5 larger count) on the map. Remember: for extended wave 3s that approach the 2.0, we look for the next fib level near 2.618 for w5. These future targets are dependent on what happens here in this wave 3.
Note
Few things to be cognizant of:1. we did get bullish on the 15m RSI which is great to see
2. inverse Head and Shoulders patterns are very common for reversals. With the recent reaction, we can define the resistance and support that shape this pattern. It also aligns with a gap underneath at -1.5%. If you're looking to add or enter, this may be a good spot. Regardless, it's important to recognize these patterns so you don't get faked out by a sharp move down. It's common to see deep wave 2 retracements after a trend reversal, as psychologically it fakes people out, and technically measures out for a larger impulse to come.
Note
We have a great buy target lined-up.Below you can find the log chart showing a confluence of support.
There may be one last pull down to 43.10ish, but don't get too greedy now. Anything from here on down is a buy!
Targets will be outlined in a future post, so we dont clog this thread down too much.
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