APOLLOTYER is preparing for a bull run. After completion of the 3rd wave at 261.2. Price had started a corrective wave ((4)) and took 38 weeks to finish this structure. A trader can trade impulsive wave ((5)) to make a high confidence trade setup.
Wave Formations and Fibonacci relationships: Wave ((1))is an impulse with a 5-3-5-3-5 wave structure.
Wave ((2)) is a zigzag move. Fibonacci retracement of wave 2 is 50% of 1st impulsive wave at 109.55. Sub-wave of wave 2 fulfilled the rule of equality (wave A= wave C) Wave ((2)) is not exceeding the starting point of wave 1.
Wave ((3)) is an extensive impulse. 3rd wave has 261.8% retracement of 1st impulsive at 261.
Wave ((4)) is a triple three with a 3-3-3-3-3 wave structure. It retraced 38.2% of the 3rd wave and did not overlap the starting point of wave 1.
What will happen next?
Completion of sub-wave z indicates that the corrective wave has ended. Price has started forming sub-waves of wave 5. The sub-wave z of wave ((4)) has formed a descending channel. If the price breaks descending channel and close above sub-wave ((b)) at 237, it will confirm the impulsive behavior.
(Note that the ending point of the corrective wave is the starting point of an impulsive wave.) A trader can expect the following targets:237-250-279-297+
Target 1: 237 [Clusters: high of wave B, the breaking point of the channel, 61.8% of reverse Fibonacci retracement of wave 4]
Target 2: 250 [Clusters: 78.6% reverse Fibonacci retracement of wave 4, high of wave X]
Target 3: 279 [Clusters: 38.2% of reverse Fibonacci retracement of wave 4, 50% Fibonacci extension of wave 1 through 3]
Target 4: 297+ [Clusters:161.8% of reverse Fibonacci retracement of wave 4, 50% Fibonacci extension of wave 1 through 3]
The safe traders can wait for the breakout of wave X. If the price fails to break the wave X, correction is about to make a new leg down. They can enter on the pullback to enter where they can manage risk with tight stop loss.
Invalidation: pullback can't break the low of wave ((4))
Comment
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Price failed to break the parallel channel. It will make a new leg. Position can only initiate after the breakout of the channel.
"X" of a w"x"y"X"z should not go above "x". However it does look bullish and could retest the upper trendline
forextidings
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@Dinesh_C_Nagpal, Thank you for your comment. I am waiting for confirmation because I am going against the trend. If price breaks the wave {{B}} of wave Z, it will fulfill my bullish setup with the next retracement on the channel. Happy to see this comment :)
Dinesh_C_Nagpal
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@forextidings, Yes fully agree with you on that. Above 225 sharp move could take place