| Author | Source |
|---|---|
| u/possibly6 |
Salutations apes, its yaboy u/possibly6 back with a different approach to technical analysis for this edition of price action and technical analysis.
As always, this aint no mothafuckin financial advice, hoe. The views expressed here are solely my approach to investing in this specific equity. I ape an am.
obligatory.
While most of my peers were out partying this weekend, I decided I’d spend the weekend diving deeper down the elliot wave theory rabbit hole. quick disclaimer, I am still very new to this concept and welcome input from even wrinklier brained ellioticians.
Here’s my NEW view of GME.
I’ll try my best to keep it simple. For those new to elliot waves, the theory basically states that the market moves in impulsive and corrective waves. Impulsive waves consist of 1,2,3,4,5 and corrective waves consist of A B and C waves.
So what can we draw from these waves? A basic rule of thumb for drawing waves:
Wave 2 targets roughly a 50% correction of wave 1
Wave 3 cannot be the shortest of waves 1 3 and 5.
The bottom of wave 4 cannot go below the top of wave 1.
With that in mind, let’s take a close look at GME.
As we can see here, the white waves move inside of the yellow waves, leading me to believe my drawings are accurate. You can see all of the above conditions are met. So where does that leave us for this week?
It looks like friday we completed out wave 2 correction from two days after ER. Remember wave 2 usually targets a 50% retracement, but 61.8% is just as much as a possibility. let’s see where we landed on friday’s low…
By tracing the bottom of the move to the top, we can see the fibonacci retracement levels to keep an eye out for. Not only did we touch the 61.8% retracement level on friday, but we ALSO bottom on the symmetrical triangle support. Here’s a view of finviz without all my waves so you can visualize better.
Also notice how we started to rebound after that level was hit. Given that there is triangle support, I would assume 152.47 was the bottom of our wave 2 of 5. So what does that mean for this week?
In order for this set of waves to be valid, remember that wave 4 cannot retrace below the top of wave 1. That would set give us a minimum price target for wave 3 of 5 of around 236.4, though wave 3 is often the biggest of the 5 waves. My potential targets for wave 3 are below.
Ironically enough, I have my big symmetrical triangle converging on 4/20. do you believe in coincidences?
Triangle converges on my favorite holiday (4/20)
Let’s talk bigger picture real quick. The yellow lines represent a bigger set of elliot waves, and the dark blue being the biggest. ignore the dark blue for now. Looking at the yellow lines, we are currently in a wave 3 of 5. Remember what I said about wave 3 often times being the biggest of the waves, and NEVER the smallest?
Wave 1 of 5 in this scenario ran from 40 to 348.5, with these numbers, that puts my first wave 3 of 5 price target at 497 ;) Before this is hit, expect wave 3 of 5 to complete within the yellow waves (white waves) followed by a quick correction.
The fib levels that stretch all the way across the screen are potential wave 3 of 5 targets.
I wanted to push myself to learn something new and after seeing all the ellioticians in this sub, I took it upon myself to try and learn it.
I am by no means an expert, but I like to think I learned the basics pretty quickly.
I gave you these targets out of the goodness of my heart. If I hear you’re trying to day trade using these targets, not only is your mom a hoe but you’ll make this ape sad. ape no want to be sad. ape together strong. ape no day trade gme. ape only buy and hold.
TLDR: Friday looks to have completed our wave 2 of 5 correction, triangle support backs this claim. theoretically we should’t drop below the 153 level again but it doesn’t matter anymore does now it… as long as price stays above 113 the waves are valid. Lowest price I see possible without having to recount is 135.25. Wave 3 of 5 (yellow waves) first target price is 497 but will likely push much past that. So hard to explain the waves but i tried 🦍
obligatory 🚀 🚀 🚀 🚀 🚀
edit: just for fun, here’s my view of $SPY. looks to me were in a wave 5 of 5, you know what comes after a 5 wave impulse… the timing of all this, the price targets, it all seems too perfect. the perfect fucking storm.
