NAS 100 D TFGood morning, everyone.
Using a combination of the Elliott Wave Principle and the RSI from the Day TF, I believe the price will reverse to the following areas identified on the workspace:
- 1st TP: 19,762
- 2nd TP: 19,526
Typically, when the price reverses or has reversed 3-5 times from the same support or resistance area, it indicates a strong zone. The price has previously reversed at least four times from both the oversold and overbought areas on the RSI.
RSI (Relative Strength Index) Breakdown:
- The RSI is a momentum oscillator that measures the speed and change of price movements.
- It ranges from 0 to 100.
- Traditionally, an RSI above 70 is considered overbought, and an RSI below 30 is considered oversold.
- These levels can indicate potential reversal points in the market.
Elliott Wave Theory Breakdown:
- Elliott Wave Theory suggests that market prices move in predictable patterns called waves.
- There are two types of waves: motive waves and corrective waves.
Motive Waves (Waves 1 through 5):
1. Wave 1: This is the initial move in the direction of the main trend. Often, this wave is not very strong and may go unnoticed as the new trend is just beginning.
2. Wave 2: This wave is a corrective wave and moves against the direction of wave 1. It usually retraces a portion of wave 1, often between 38.2% and 61.8% of the first wave's move.
3. Wave 3: This is typically the strongest and longest wave in the five-wave sequence. It moves powerfully in the direction of the main trend and often exceeds the end of wave 1. Wave 3 usually captures the attention of traders and is characterized by increased volume and momentum.
4. Wave 4: This is another corrective wave that moves against the direction of wave 3. It usually retraces a portion of wave 3, often between 38.2% and 50%. Wave 4 is typically less intense than wave 2.
5. Wave 5: This is the final motive wave in the sequence. It moves in the direction of the main trend and often equals the length of wave 1. Wave 5 is usually characterized by lower momentum and may create a divergence between price and technical indicators.
After the completion of waves 1 through 5, the market typically undergoes a three-wave corrective phase labeled A, B, and C, which moves against the overall trend established by waves 1 through 5.
Fibonacci Retracement Levels and Corrective Waves:
- Fibonacci retracement drawn from waves 4 to 5 suggests that corrective wave (a) may fall between the 38.2% and 50% retracement levels.
- When drawn from wave 5 to wave (a), corrective wave (b) may fall between the 38.2% and 50% retracement levels.
- When drawn from wave (a) to wave (b), corrective wave (c) may fall between the 138.2% and 161.8% retracement levels.
However, keep in mind that the price can be unpredictable, so always trade with caution. This is not trading advice; always use your own analysis. Please feel free to comment, provide corrections, advice, or any positive input.
Thank you, and have a great day.
