Looks likely to be in ABC Elliott Wave Correction Phase. Momentum is still negative despite being above the 14MA. Volatility slowing which shows a lack of buying interest. I will be looking to BUY if price follows the predicted path and drops back down to supply zone. At the same time, I would like to see some clear divergence on the momentum or for the momentum to be closer to positive territory and certainly above the 14MA.
Comment:
First step today on a move down as per possible path hopefully.
Trade active:
The possible path appears right so far. Price has returned to supply zone. Big volatility and a big drop but closed outside supply zone and did not get below previous low despite push down. The momentum indicator is showing clear divergence. In a few other instances of a low or high before a change of direction there has been a doji candlestick so there may not be an immediate move up. The negatives for this deal is that the momentum indicator is still negative. The previous price lower than this current supply zone was in August 2021 at around 6089. I have put my stop below the last previous low on the daily.
Comment:
Not stopped out yet and although there is a temptation to close out the trade, the volatility did show a fair reduction despite the move down today. The momentum though, has moved to show above average negative momentum. I still feel confident that the path is correct and if this trade was an obvious one, chances are stop hunters have been on the prowl to bring price down below the supply level. I have looked over the 4hr chart and 1hr chart and do still think this trade is a BUY.
Comment:
Still in the trade and today appears to show the candlestick that has ended (B) move down. The 4 hour chart shows considerable momentum divergence to the upside so I am still hopeful that this BUY trade will start making progress.
Comment:
The doji candle stick has appeared on close of the daily candle. The daily momentum indicator is showing a good move up. The odds are improving for this BUY trade to work out as per the possible path identified.
Comment:
There is a good rise on the momentum indicator despite price consolidating at the end of wave B. With some really strong momentum divergence also showing, the odds of this BUY trade taking off soon have increased.
Comment:
Another strong move up on the momentum indicator and some bullish price action. Is tomorrow going to be the day that price gets a rocket underneath it? I truly hope so.
Comment:
Still showing some strong divergence on the momentum indicator from the 10th March to the 23rd March and up to today. Divergence is when the price comes down but the momentum indicator is moving up into positive territory. You can't just trade using divergence but it is useful to help spot turning points in conjunction with other indicators or chart knowledge. I am still hopeful that this BUY trade will move up.
Comment:
Finally a good move up today. Momentum has also moved up strongly and is now positive and well above the 14MA. Another good sign is that the 5EMA and 11SMA have crossed. Good practice is to move the stop to break even / small profit if possible.
Trade closed: stop reached:
Stopped out on tiny profit and therefore not a loss (very important). I'm not going to re-enter immediately because of the amount of selling today and also the momentum indicator has just blipped down outside of my trading plan. I still think this is a BUY trade and will hopefully see an opportunity to trade this path in the coming days.