Possible 5-3-5 zigzag pattern forming on Nasdaq for at least one more leg up to C. This has been labelled as an ABC because it’s the bare minimum for an impulse 12345 also being wave 3.

nasdaq

Nasdaq – We must get the 3rd wave or C wave regardless of labelling which should be 5 sub waves. Please see picture below for reference. Elliott wave principals can be quite complex so it’s best to learn the basics and backtest.

 Key Points:

  • Price holding above the 200 EMA
  • Price holding above the 50 EMA
  • ABC correction complete
  • Target of 61.8% – 78.6% Fibonacci levels using range September high – September low
  • The sub-wave (2) is the ideal entry for this next run
  • A retest of 50 EMA could be the low of sub-wave (2)

 

Key Levels:

Support – 50 EMA, 200 EMA, 11350

Resistance – 11500, 11782, 12075

 

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – 11350

Supporting Entry – 11500

 

Candle Reversals for entry

  • Bullish Hammer
  • Bullish Engulfing
  • Bullish PiercingCandlestick

 

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

 

IF: Price breaks below 11122.8 level and violates 200 EMA – this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

 

Reward / Reward Targets:

Optimal Entry 11350 – Target 1 12075 = 3x Reward to Risk

Supporting Entry 11500 – Target 1 12075 = 1.5x Reward to Risk