The breakdown of the diagonal is likely a HTF Primary W1 into W2 because it's on the monthly. Typically a leading diagonal is a bearish precursor to a reversal.
Also leading diagonals most likely form a wave 1 into w2 set ups.
The 786% might be too optimistic, as the wave 1 was 5 up which means sub wave A which equals the 5 up diagonal which equals the HTF w1 is a HTF Zig Zag & Zig Zags can bounce off the 50%-618%.
But the underlying nature of W2 is to destroy any hope of the wave 3.
So rather the 786% is usually a trademark of the wave 2.
Basically a lot of conflicting forces at play here as to where the bottom forms.
But catching this dip for a LT play seems very smart as W3 is targeting $16-$18 & Wave 5 $200 plus.
Also leading diagonals most likely form a wave 1 into w2 set ups.
The 786% might be too optimistic, as the wave 1 was 5 up which means sub wave A which equals the 5 up diagonal which equals the HTF w1 is a HTF Zig Zag & Zig Zags can bounce off the 50%-618%.
But the underlying nature of W2 is to destroy any hope of the wave 3.
So rather the 786% is usually a trademark of the wave 2.
Basically a lot of conflicting forces at play here as to where the bottom forms.
But catching this dip for a LT play seems very smart as W3 is targeting $16-$18 & Wave 5 $200 plus.