Monday, September 17, 2018

ComfortDelGro Analysis (2)

The Elliott Wave pattern for ComfortDelGro correction is one of those that could go either way from different perspective.  Hence, it is worth archiving it for future reference.


It is obvious the correction is unfolding into an ascending triangle correction.  However, the questionable part is the first drop from the peak.  The first drop looks develop into a 5-wave impulse (i-ii-iii-iv-v) highlighted in red in the chart.  Normally, if the wave A of the correction is a 5-wave impulse, it should be quite clear the correction will develop into a zigzag and the triangle being the wave B.  However, as the correction develops, the triangle turns into an ascending triangle.  According to Elliott Wave, ascending triangle is linked to breakout to the upside.  Should the triangle be wave B for the zigzag, it will either be a descending or a similar triangle.  This has contradict the 5-wave impulse observed in wave A.


In Elliott Wave any bottom up approach of wave count must tally with the wave count done from top down approach.  From a higher degree level, it is quite obvious ComfortDelGro only completes wave 1, 2 and 3.  This implies the current correction is wave 4.  Since wave 2 correction is a deep one (50% or more Fibonacci Retracement), wave 4 due to its alternation nature shall be a shallow one.  From the chart, the node E of the triangle ends around the 38.2% Fibonacci Retracement which is reasonable for a wave 4 correction.

Since from top down approach indicates a wave 4 correction, if the correction develops into a zigzag it will send the price to a deeper level (due to wave C) which doesn't quite make sense for wave 4 correction for this case.  If this is a wave 4 ascending triangle, the 5-wave impulse observed should be a zigzag pattern, a typical characteristic for a triangle wave as triangle is known as 3-3-3-3-3 structure.  From another perspective of using a-b-c wave count, that first part forms a w-x-y pattern (as shown in the first chart) and that is literally a zigzag pattern.  This pretty much conform to the guideline for a triangle correction.

The confirmation for this ascending triangle correction will be the breaking out at $2.38 with high volume.  In earlier ComfortDelGro Analysis dated 11th August 2018, the non-technical aspect was analyzed and was found that going forward the fundamental should be improving for ComfortDelGro and that should support the price moving higher thus provides another support for the case of an ascending triangle correction.

Added 29th Sep 2018
Finally, the breakout at $2.38 occurred and that affirmed the Elliott Wave ascending triangle pattern correction.  In fact, was quite a textbook case.


The chart showed the ascending triangle correction pattern and the path to breakout.  What's amazing is the impulse wave after wave e of the ascending triangle follows exactly Elliott Wave pattern of 1-2-3-4-5 with the appropriate Fibonacci Ratio.  Now it is at wave iii, should expect a retracement for wave iv coming before resume to wave v.  This should be the sub-level of the wave 5 (wave 4 being the ascending triangle correction).

Added 4th Oct 2018

The hit of $2.49 from yesterday could be the end of the uptrend which started at $1.805 from Dec 2017.


As mentioned, the recent triangle correction is a wave 4 correction so the up wave after that will be wave 5.  From the above chart, wave 3 is more than 1.618x of wave 1 and as a guide, wave 5 could be either same length or 1.618x of wave 1.  Length of wave 1 is 2.08 - 1.805 = 0.275.  From the base of wave 4, $2.22, the same length of 0.275 would end at $2.497.  The pull back from today is the key now.  If wave 5 is not same length as wave 1 (meaning 1.618x of wave 1 which is about $2.66) then the current pull back is the sub-level wave ii of wave 5.  $2.32 is the 61.8% Fibonacci Retracement for this wave ii.  If this level is broken, this pull back is the correction after the 5 waves.

3 comments:

  1. Does it mean that wave iv will not retrace lower than 2.36 and this would be the entry point before the next upside?

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    1. first we do not know wave iii already done as according to Fibonacci Ratio it should be around 2.48. however, these 2 days it seems to have problem getting past 2.46, so that could be the end of wave iii. assume it is end of wave iii, wave ii did a between 38.2% to 50% retracement, so i would expect wave iv to do probably between 23.6% to 38.2% and this is between 2.40 to 2.42/2.43. the peak of wave i is 2.38 not 2.36 so it should not go lower than 2.38. if that happens, might be to recount meaning what we are seeing the i-ii-iii after breaking out is not correct.

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  2. Thanks for the analysis. Let's see how it turns out in the next few days.

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