In this post i have tried analyzing chart by combining both price/volumes and time factor simultaneously. For deciding trend and predicting price i have used Elliot wave theory and for timing and entry/exit i have used cycle theory.
Elliot wave theory Impulse wave rule:
1)Wave 2 can't retrace wave 1 entirely
2)Wave 3 can't be shortest of wave 1,3 and 5
3)Wave 4 can't enter wave 1 price action zone.
Time rules of Neo wave (Extention of Elliot wave)
1)Wave 2 takes equal or more time then wave 1 took to form
2)Wave 4 takes equal or more time then wave 3 took to form
Wave labeling is done by following this rules.
Wave Count
Primary : Wave 4(Green)
Intermediate : Wave A(White)
Minor : Wave C(Orange) not shown.
Analysis:
As far as wave count's are concerned, since covid low's we are seeing impulsive rise in which we have completed wave 3 on Primary degree(green) and currently we are in Primary wave 4,Intermediate wave A, and going ahead prices will continue to correct or stay side-ways until Primary wave 4 is done,as wave 3 was extremely extended possibility of Primary wave 4 being an running flat is low meaning any forth coming bounce will not give us new high.
Time wise :As per Neo wave rule
1) Primary wave 4 can continue till December 2022 hence entering at current levels is not advisable.
Price wise :Support areas for Primary wave 4 to end.
1)We have 50 % retracement of Primary wave 3 coming at 641 along with minor wave 4 low's at 655 along with 200 ema average @ 620 which would keep increasing,there by making price action support zone of 640-660.
2)61.8% retracement of Primary wave 3 @ 530 and previous All Time High coming at 555 level(Confluence for price support) along with running intermediate trendline(white) making price action support Zone of 530-555.
3)Theoratically Primary wave 4 end's near Intermediate wave 4 of extended Primary wave 3 which is coming at 360 levels,we also have 80% retracement of Primary wave 3 coming at 360 level(Confluence for price support).
JM Hurst Cycle theory:
It states that stock prices follows definite cycle and achieve significant lows or trough's at the end(beginning) of each cycle.During any cycle price makes meaning low's around every cycle period time zone.Post a cycle low zone, prices reverses or trend changes,and if the low's made during cycle period time zone get's broken in the next cycle then during that entire cycle prices tend to correct.After his years of observation JM Hurst has found Nominal Cycle model which describes standard cycle's found in the markets he researched.One of the cycle he mentioned in Nominal model is of 20 weeks(which is being followed over here).There are many principles of cycle theory which i am not describing over here as it would complicate things.
Time Cycle: 22 week
Since beginning GNA AXLES seems to be following 22 weeks cycle meaning after every 22 weeks meaning full low is formed,post which we have seen prices going up and it this low is broken in the next cycle then during that entire cycle prices has corrected.Over here i have somewhere i have taken 23 weeks and somewhere 24 weeks just to capture exact low's however it can be seen that most of the time prices has formed low on 22nd week indicating stock is following 22 week cycle.As of now we are nearing cycle low time zone(week ending on 6th December)meaning after first or second week of December we can see minor bounce in the prices as per time cycle.
Combining Volumes:
Volumes were rising during this entire rise from covid low's during every impuslive wave high formation ie from Intermediate 1 of Primary 3 till Minor 3 of Intermediate 5 of Primary 3,and we can clearly see volume divergence on minor 5 high as it was achieved on an significantly low volume compare to minor 3 high.
Conclusion:
Price and time are not in favour of bulls hence investor or trader should keep stop-loss on there existing long positions depending upon there risk appetite and fresh long's should be avoided until Primary wave 4 is done.Any bounce from current price should be used to exit long positions.
Disclaimer:The analysis done in this post is just for education purpose and to introduce concept of time cycle,no position should be build or exited solely on it's basis.
Elliot wave theory Impulse wave rule:
1)Wave 2 can't retrace wave 1 entirely
2)Wave 3 can't be shortest of wave 1,3 and 5
3)Wave 4 can't enter wave 1 price action zone.
Time rules of Neo wave (Extention of Elliot wave)
1)Wave 2 takes equal or more time then wave 1 took to form
2)Wave 4 takes equal or more time then wave 3 took to form
Wave labeling is done by following this rules.
Wave Count
Primary : Wave 4(Green)
Intermediate : Wave A(White)
Minor : Wave C(Orange) not shown.
Analysis:
As far as wave count's are concerned, since covid low's we are seeing impulsive rise in which we have completed wave 3 on Primary degree(green) and currently we are in Primary wave 4,Intermediate wave A, and going ahead prices will continue to correct or stay side-ways until Primary wave 4 is done,as wave 3 was extremely extended possibility of Primary wave 4 being an running flat is low meaning any forth coming bounce will not give us new high.
Time wise :As per Neo wave rule
1) Primary wave 4 can continue till December 2022 hence entering at current levels is not advisable.
Price wise :Support areas for Primary wave 4 to end.
1)We have 50 % retracement of Primary wave 3 coming at 641 along with minor wave 4 low's at 655 along with 200 ema average @ 620 which would keep increasing,there by making price action support zone of 640-660.
2)61.8% retracement of Primary wave 3 @ 530 and previous All Time High coming at 555 level(Confluence for price support) along with running intermediate trendline(white) making price action support Zone of 530-555.
3)Theoratically Primary wave 4 end's near Intermediate wave 4 of extended Primary wave 3 which is coming at 360 levels,we also have 80% retracement of Primary wave 3 coming at 360 level(Confluence for price support).
JM Hurst Cycle theory:
It states that stock prices follows definite cycle and achieve significant lows or trough's at the end(beginning) of each cycle.During any cycle price makes meaning low's around every cycle period time zone.Post a cycle low zone, prices reverses or trend changes,and if the low's made during cycle period time zone get's broken in the next cycle then during that entire cycle prices tend to correct.After his years of observation JM Hurst has found Nominal Cycle model which describes standard cycle's found in the markets he researched.One of the cycle he mentioned in Nominal model is of 20 weeks(which is being followed over here).There are many principles of cycle theory which i am not describing over here as it would complicate things.
Time Cycle: 22 week
Since beginning GNA AXLES seems to be following 22 weeks cycle meaning after every 22 weeks meaning full low is formed,post which we have seen prices going up and it this low is broken in the next cycle then during that entire cycle prices has corrected.Over here i have somewhere i have taken 23 weeks and somewhere 24 weeks just to capture exact low's however it can be seen that most of the time prices has formed low on 22nd week indicating stock is following 22 week cycle.As of now we are nearing cycle low time zone(week ending on 6th December)meaning after first or second week of December we can see minor bounce in the prices as per time cycle.
Combining Volumes:
Volumes were rising during this entire rise from covid low's during every impuslive wave high formation ie from Intermediate 1 of Primary 3 till Minor 3 of Intermediate 5 of Primary 3,and we can clearly see volume divergence on minor 5 high as it was achieved on an significantly low volume compare to minor 3 high.
Conclusion:
Price and time are not in favour of bulls hence investor or trader should keep stop-loss on there existing long positions depending upon there risk appetite and fresh long's should be avoided until Primary wave 4 is done.Any bounce from current price should be used to exit long positions.
Disclaimer:The analysis done in this post is just for education purpose and to introduce concept of time cycle,no position should be build or exited solely on it's basis.