The ending diagonal drawn out yesterday seems to have developed well having bounced off the upper diagonal resistance. The current downleg which im counting as a wave 4of c i have as going to low 13700s before making one more high to complete the diagonal.
In Contracting traingle wave 2 and 4 usually retrace .66 to .81% of the preceding wave. Wave 2 did 61.8%. Wave 4 if it does 61.8 of wave 3 is 13719. I have the bottom diagonal resistance line at 13709.
In the EWT book, the main rules about contracting triangles are:
- Wave 3 is always shorter than wave 1 - TICK
- Wave 4 is always shorter than wave 2 - SO FAR TICK
- Wave 5 is always shorter than wave 3 - STILL TO SEE
- Wave 4 always ends within the price range of wave 1 - SO FAR TICK
So, i am looking to go long at around the 13710 area, looking for 100pts. Again, im going to have to play this by orders as im unable to trade during the day due to work commitments. Stop will be not too far below the rising trendline
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