Base on Elliot Wave pattern, China Zaino shall bounce back from this support and start the 5th Wave. However, Wave 2 and Wave 4 seems to over-correct to 38.2% Fibonacci Retracement Level.
Wednesday, November 4, 2009
China Zaino - Is this 200D MA Support Strong Enough?
China Zaino is testing its critical support at $0.23 (200D MA support) to $0.235 (61.8% Fibonacci Retracement Level).
Base on Elliot Wave pattern, China Zaino shall bounce back from this support and start the 5th Wave. However, Wave 2 and Wave 4 seems to over-correct to 38.2% Fibonacci Retracement Level.
Base on Elliot Wave pattern, China Zaino shall bounce back from this support and start the 5th Wave. However, Wave 2 and Wave 4 seems to over-correct to 38.2% Fibonacci Retracement Level.
Subscribe to:
Post Comments (Atom)
Hi I'm rather new to the trading world (5 months only) and your blog is quite useful. Have you been trading for very long and are you a remisier? I was wondering... isn't $0.235 the 38.2% FR instead of the 61.8%? And I thought the bottom of W4 doesn't normally go below the top of W1? Thanks for your help.
ReplyDeleteCheers
Spencer
www.synapsetrading.blogspot.com
Hi Spencer, thank you for the comment. I have a full time job but not a remisier. I am also as new as you (5 months too) and still learning various trading skills and investing skills.
ReplyDeleteThere are two charts in my post. The 1st chart takes Wave 1 (start point) and Wave 3 (end point) as 100% Fibonacci Range. Wave 4 correction to $0.235 is 61.8% retracement level.
The 2nd chart takes Wave 1 (only) as 100% Fibonacci range, Wave 2 retraced back to 38.2% level ($0.19). Similarly, Wave 3 (only) as 100% Fibonacci range, Wave 4 retraced back to 38.2% level ($0.235).
The Elliot Wave theory states that the retracement should be 61.8% but I observed there is 38.2% retracement in China Zaino. One possible reason to explain this over correction may be due to lack of volume and thus the technical analysis is not very efficient. Will need to see whether China Zaino can complete the Wave 5 to confirm my hypothesis.
I hope I have answered your question.
With regards to the first chart, using the points $0.110 and $0.315 as the range, a retracement to $0.237 should be FR38.2%.
ReplyDelete$0.315 - ($0.315-$0.110)*0.382 = $0.237
Cheers
Spencer
www.synapsetrading.blogspot.com
Yes. It retraced 38.2% to 61.8% Level.
ReplyDeleteSorry if this is a bit technical, but I thought that its called the Fibonacci 38.2% retracement level because at that point prices have retraced 38.2%.
ReplyDeleteCheers
Spencer
www.synapsetrading.blogspot.com
If you look at the chart, it is called 61.8% Fibonacci Retracement Level when the stock price retrace 38.2%.
ReplyDelete