Price has been in a bullish move which I consider to be an impulse wave. As we know that wave 1 and 4 never overlaps which in some cases I can allow us to trade the fifth wave, but that is defined by how the 4th wave unfolds. Wave 3 is never the shortest in whatever case. So the deeper the wave 4 correction the better it is to be able to trade the fifth wave.
So, in this case, wave 4 was retraced between 38,2 to 50 fib retracement and also we have what we consider to be a base channel. Wave 4 made a 4th touch to the base channel which can suggest that the price will start moving to the upside from that level. Also keeping waves 1 and 4 never overlaps, this may be helpful to set stop losses/invalidation.
So, in this case, wave 4 was retraced between 38,2 to 50 fib retracement and also we have what we consider to be a base channel. Wave 4 made a 4th touch to the base channel which can suggest that the price will start moving to the upside from that level. Also keeping waves 1 and 4 never overlaps, this may be helpful to set stop losses/invalidation.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.