In this Technical blog we’re going to take a quick look at the past Elliott Wave chart of IBEX chart from March 22,2017 and we are going to explain the structure & see how the index continued the rally afterwards.
IBEX 1 Hour March 22 London updated chart
Above chart is showing Elliott wave Triple three sequence remains in progress within the cycle from 2/08 lows, in Minute degree and index was showing 9 swings bullish sequence from that cycle favoring more upside extension as far as dips remains above 9877 second wave ((x)) connector low (9877). Also the sequence from 9877 low looks to be impulsive rather then corrective, thus creating a possible Elliott wave zigzag structure was in progress. According to Elliott wave theory Zigzag is a 3 wave structure having internal subdivision of (5-3-5) swing sequence where internal subdivisions are labeled as A, B, C where A = 5 waves, B = 3 waves and C = 5 waves. This means that A and C can be impulsive or diagonal waves. Also the A and C waves must meet all the conditions of 5 wave structure, such as: having an RSI divergence between wave subdivisions, ideal Fibonacci extensions, ideal retracements etc. So our Strategy was to buy the Intraday Minutte wave (b) pullback from 50-764% fib ret area ( 10110-9991 ) blue box area for another extension higher in the index provided the pivot at 9877 low remains intact or for 3 wave bounce at least.
IBEX 1 Hour March 31 NY Midday updated chart
Index found the buyer’s from the blue box area as expected & ended wave (b) pullback at 10110 low. Up from there index started the another 5 waves as expected in wave (c) higher & now should be ideally looking for 10545 – 10652 area next week and make a 3 wave pull back at least from there. We don’t like the selling but 10545 is the area for longs from 10110 to book profits and RSI divergence at the peak should stay intact for the 5 waves in (c) idea to remains valid. Note if it gets erased during the next high, then it could end up being a (w) – (x) – (y) triple three structure from 9887 low.