Waiting for the Triangle pattern to be finished | NIOToday we will take a look at the current formation on NIO
From a technical perspective, we are observing a triangle pattern. But what is a triangle pattern?
Ralph Nelson Elliott one of the fathers of modern technical analysis, and the creator of the Elliott Wave theory, Identified that the price moves on impulse and corrective sequences.
One is followed by the other one. Based on that he defined 4 types of corrective patterns
-Flat
-Zig-Zag
-Irregular
-Triangle
He also created a system that helps us know when a pattern is finished or we should keep waiting. The example we will use is a triangle pattern. Triangle patterns have 5 waves ABCDE, once we are able to count those waves and we can define clear edges both on the top and bottom of the pattern, we can think about breakouts and the beginning of a new impulse.
In the current situation of NIO, we can count ABCD, and we should wait for E to be sure that the pattern is finished. Once we have that, we can define activation levels as you can see on the chart, and we can define invalidation levels below the structure. The targets of these structures can be defined using fibo extensions or cloned channels.
The main purpose of this is to find situations that we are sure are finished and avoid engaging on charts that we don't have certainty about that.
So my conclusion on NIO is that the pattern is not finished yet, and I would like to see that E wave before thinking about the idea of a new bullish trend happening. Thanks for reading!
