Out of the uptrend chnnel; four possible scenarios from now on
Atualizado
Wave B has ended and we retraced brutally at 0.382 Fib level, with a volume unseen since May the 3rd. We've already exited from the large cyan uptrend channel and we're now testing the blue recent maxima downtrend line together with the $9098 support line. However the zone $8900-9000 proved to be a pretty strong support, so wave C might stop there. Therefore I see four possibilities from now on.
If we continue down below the $8900 bounce zone of wave A, the most probable scenario is to end the wave C somewhere in the region $8200-8500 and bounce from there with an impulse wave. However, even if unlikely, a second scenario is still possible, where the ABC pattern (orange) extends to 12345 targeting the strong support at $6000 (but many strong supports are still in the way), so if we ride the bounce from wave C we should put a clever stop loss.
If we stop above $8900, we'll be forced to build a range and consolidate with an ABCDE pattern (thin red line), maybe drawing a triangle. At the end of the consolidation pattern, a breakout should happen with an impulse wave, either bearish or bullish (arrows); because we would be out of the uptrend channel, after consolidation I would opt 60% for the bearish scenario; but a bullish impulse will certainly happen after the end of any of the 3 bearish scenarios. Hard to call a target for the bullish scenarios, we have to see the first retracement.
If we continue down below the $8900 bounce zone of wave A, the most probable scenario is to end the wave C somewhere in the region $8200-8500 and bounce from there with an impulse wave. However, even if unlikely, a second scenario is still possible, where the ABC pattern (orange) extends to 12345 targeting the strong support at $6000 (but many strong supports are still in the way), so if we ride the bounce from wave C we should put a clever stop loss.
If we stop above $8900, we'll be forced to build a range and consolidate with an ABCDE pattern (thin red line), maybe drawing a triangle. At the end of the consolidation pattern, a breakout should happen with an impulse wave, either bearish or bullish (arrows); because we would be out of the uptrend channel, after consolidation I would opt 60% for the bearish scenario; but a bullish impulse will certainly happen after the end of any of the 3 bearish scenarios. Hard to call a target for the bullish scenarios, we have to see the first retracement.
Nota
We passed the bounce point of wave A, crossed the blue downtrend line and the green uptrend line, and we are now hammering the support zone at $8890-8900.If we shall cross it, we'll have to confront the EMA 1200 which is now at $8700 and should act like strong support.
A shortened wave C at this point would be a bullish consolidation, therefore a good opportunity to go long, I think. But wave C would want to be longer, so let's just see if the supports hold.
Nota
So far the orange scenario (that I thought most probable) got validated. In this moment most supports are broken and we are tapping on the EMA 1200; if we go through, and below the support line at $9697, then we would create a larger and steeper downtrend channel; odds would be very bearish in short termNota
We went down through the EMA 1200 and we are now in the $8600's . RSI is oversold, but while wave A subwaves retracements were very visible, there is no clear subwave retracement in wave C until now. So I might speculate that this is only the first subwave of wave C retracing now. I might expect then to go lower; with such a long third wave we might expect that this is actually a 12345 impulse pattern. If we don't climb back through $8700 and we are forming a bear flag pattern, it really might be the case. Strong probability to go below $8000; maybe retrace in the region $7912-$8000 where we have strong support. So far the H&S pattern that has just confirmed will push us at least to $8200Nota
After tracing the Fib level of the initial 1345 uptrend impulse pattern, I am coming with a more precise target.If we really are in a corrective ABC pattern, we should restart uptrend at minimum Fib level 0.5 (approx $8361) or 0.618 ($7964).
If we would go lower than $7366 (Fib level 0.786) the news would be rather bad, because it would mean a bearish reversal, even crash pattern, that level being below the bottom uptrend line started from the bullish reversal at $6600.
Nota
Interesting day! We've tried to go below the $8307 with two wicks, then the bulls pushed and tried a retracement at 0.5 Fib level; but they got rejected hard at $8501 after trying the EMA 1200 another time with a single wick, and now we're back to the support region at $8307-8361. We are probably building a rectangle pattern between the mentioned resistance and support, which makes hard to predict in which direction we're going. But note that the MACD didn't really have a bullish crosover, it's only tangling now. We've had and still have hidden bearish divergence on the momentum, which is a continuation pattern, and the volume wasn't big enough for a healthy bullish retracement. Therefore this should be either a subwave retracement for a longer wave C (so far, it's as big as the retracements of the subwaves in wave A), or if it gets longer, we're actually in the wave 4 of a 12345 pattern. So in my opinion, we're going further down. And take care, if it's only a minor retracement and wave C gets much longer, it might be actually a wave 3!!!
In the case we are in wave 4, the target would be somewhere at $7400-7500; if it's a wave 3, it would be much lower, probably testing the uptrend support at $6800 if not worse.
Hard to set a target if ABC scenario is still valid, maybe $7366 (0.786 Fib level).
Nota
We have mixed signals now. On one side, MACD finally had a bullish cross, but now we have a short term hidden bearish divergence on the RSI too. MACD signal isn't bullish yet. And we are printing a large bear flag or pennant. Bulls really have to fight hard if they want to win.Nota
The update is here:
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