In this technical blog, we will look at the past performance of the 4-hour Elliott Wave Charts of XLY. The rally from 13 March 2023 low unfolded as an impulse structure. And showed a higher high sequence favored more upside extension to take place. We will explain the structure & forecast below:
Here’s the 4hr Elliott wave chart from the 8/02/2023 update. In which, the cycle from the 3/13/2023 low ended in wave (3) as an impulse structure at $177.80 high. Down from there, the ETF made a pullback in wave (4) to correct that cycle. The internals of that pullback unfolded as Elliott wave zigzag structure where wave A ended at $170.01 low. Wave b bounce ended at $175.25 high and wave C managed to reach the blue box area at $167.44- $162.61. From there, buyers were expected to appear looking for the next leg higher or for a 3 wave bounce minimum.
This is the latest 4hr Elliott wave Chart from the 8/06/2023 Weekend update. In which the ETF is showing a strong reaction higher taking place, right after ending the zigzag correction within the blue box area. However, a break above $177.80 high is still needed to confirm the next extension higher & avoid a double correction lower.