The price of Creative Technology breakout from correction on 19th Sep 2018 as described in previous analysis. Though the correction pattern is able to use an Elliott Wave double-three (zigzag - triangle) combination pattern to describe, it is still pretty unsure whether the whole price performance (from past to future) follows Elliott Wave. Creative Technology fell from $10 to a low of $5 during the correction and the Elliott Wave count reached the end of the correction at $5.66. The lowest price of Creative Technology since the peak in 2000 is at $0.855 happened in September 2015. If from that point to $10 is considered a wave 1 in Elliott Wave, the depth of the correction at $5 is between 50% to 61.8% Fibonacci Retracement while at $5.66 it is between 38.2% to 50% Fibonacci Retracement. These ranges are pretty acceptable and common for an Elliott Wave correction. Thus, the price does appear to follow Elliott Wave.
The above chart is Creative Technology stock price since 1994 (the earliest data I can get). From the period of 1994 till now, the only pattern that could fit into an Elliott Wave is the big correction from 2000 till 2015. Assuming the peak in 2000 (should be the peak since it was listed till now) is Wave ((5)) of a Supercycle degree then the correction can fit in an Elliott Wave count of ((A))-((B))-((C)) forming a 5-3-5 zigzag pattern. The correction lasted 15 years and that kind of time frame fits into the description of a Supercycle degree in which 1 full Supercycle will take multi decades (40 to 70 yrs) to complete. From the trough of $0.855 in 2015 till the recent peak at $10, that could be Wave 1 of Primary degree and the recent correction is the Wave 2 of Primary degree. By using the basic Elliott Wave pattern and Fibonacci Ratio as guideline, Cycle degree Wave 1 shall hit $24.80 as shown in the chart above. This is the top-down approach analyzing from past to future should it follow Elliott Wave.
The above chart shows the forward projection doing a bottom-up Elliott Wave approach starting from post correction. Assuming Minor Wave I since the end of the correction ended on 21st Sep 2018 at the price of $6.88, a Fibonacci Ratio guideline for a basic Elliott Wave pattern (w1 : w3 : w5 = 1 : 1.618 : 1, w2 = 0.618 w1, w4 = 0.382 w3) will lead to Minor Wave V to end at $8.85 as shown in the chart above. Using Fibonacci Calculator, peak of Minor Wave V is the peak of Intermediate degree Wave (I), this will lead to peak of Intermediate Wave (V) at around $14. Peak of Intermediate Wave (V) is the peak of Primary Wave 3 (since the correction is Primary Wave 2). From the top-down approach (the earlier chart), it was projected Primary Wave 3 ends at $15.65, which is just $1.65 more than the $14 projected from bottom-up approach.
Now suppose Minor Wave I peaks at $7 (the highest it rose during correction and potentially a resistance), Minor Wave V will be at $9.17. With that it will lead to Intermediate Wave (V) or Primary Wave 3 to be at $14.85, even closer to the $15.65 guide. The bottom-up approach for Primary Wave 3 cannot be less than $14 as Minor Wave I mathematically is impossible to be less than $6.88. The bottom-up projection can be refined after Minor Wave I peak has established.
The top-down approach and bottom-up approach both pretty much point to roughly the same value suggesting that should going forward price performance follows the trajectory, it should follow Elliott Wave pattern already.
Stock price performance is not about pure paper talk from technical analysis perspective, the fundamental of the company business plays a very important part in determine the price movement. The success of Super X-Fi could be the fundamental turning point for it to follow Elliott Wave pattern.
Going forward should be interesting for Creative Technology. Should the stock price confirm to follow Elliott Wave then this will open a very big opportunity in investment or trading, a potential multi-beggar as the Cycle degree Wave (1) is projected to be at $24.80 and this will give a projected Cycle Wave (5) peak to be at $63.54 (many years or even decades later), roughly the same peak in 2000. Thus, this is worth monitoring whether it follows Elliott Wave.
Added 24th Sep 2018
As mentioned expect $7 to be a resistance and probably peak of Minor Wave I. It rose to an intra-day high of $7.04 and retreated to an intra-day low of $6.35, exactly at the 50% Fibonacci Retracement level. Is that Minor Wave II ? Need to observe few more days for stabilization is it really the low of Minor Wave II or it could fall back further to $6.18, the 61.8% Fibonacci Retracement level, common for wave 2 in general. Though at the moment the price movement seems following Elliott Wave but not jumping into conclusion too early. A rebound from this pull back if following Elliott Wave should breakout from $7 (or $7.04) for Minor Wave III. If that happens, it will be very close in concluding the price movement indeed follows Elliott Wave.
From statistical perspective should it following Elliott Wave, Minor Wave III and V if no extension occurs shall be $7.89 and $9.27 respectively. This will be the peak of Intermediate Wave (I). If that is the case, the Intermediate Wave (II) with a 61.8% Fibonacci Retracement shall hit $7.03 (roughly the peak of Minor Wave I). Thus, for those holding at price $7 or below will have a very very good margin of safety to aim for the peak of Primary Wave 3 at $15.11 (calculation based on today pricing) or the projected Cycle peak stated above.
Added 26th Sep 2018
Hit intra-day low of $6.20, just 2 bids more than the 61.8% Fibonacci Retracement level at $6.18 before closing at $6.22. Correction doesn't look done but on the bright side is the daily volume is about half of the previous day since hitting the high of $7.04. Could be a sign of correction stabilizing. Too early to tell what type of pattern and how long this correction will drag it out. Wondering will it pull back to re-test the breakout level which about $5.96 ? Another scenario could happen that should the price fall back into the triangle meaning the overall correction since hitting $10 is still not done and will have to recount the Elliott Wave. Let hope this will not happen. As Creative is scheduled to release the SxFi Air in November, the correction could drag till earliest October or worse November.Added 27th Sep 2018
Today could be forming the Wave B of the A-B-C as it hits an intra-day high of $6.57, a bit off from $6.62, the 50% of Wave A. If it moves down further to between $5.95 to $6.18, the 78.6% to 61.8% Fibonacci Retracement, will be forming the Wave C.Added 1st Oct 2018
Been monitoring the 15-min chart since hitting the high at $7.04 to determine whether any Elliott Wave correction pattern has developed. The following is what's being discovered.
It looks like developing into a double-three correction of zigzag - triangle pattern just like the one before the breakout just that it is at a lower Elliott Wave degree. At the moment the last part of the double-three, the triangle pattern is unable to conclude whether it has run its course. As such, 2 possibilities, the blue label indicating today after hitting an intra-day low of $6.27 is the overshoot part of wave e of the triangle a-b-c-d-e. Hence, a breakout could be next at $6.35 thus ending the correction. The 2nd possibility is today only form the wave c of the a-b-c-d-e of the triangle. As such, it shall have a rebound to form wave d then the last down wave e (overshoot or undershoot) to complete the correction.
1. The triangle pattern looks like a descending triangle given today low but technically speaking descending triangle is always followed by further down hence, the correction pattern might not turn out to be a triangle.
2. It could be an ending diagonal wave with now on the wave v, might break below $6.20 or rebound from here
On the daily chart, the pull back still on track of hitting the 61.8% Fibonacci Retracement level at $6.18 or even the 78.6% level at $5.96 to complete a typical zigzag pattern. As this is an Elliott Wave Primary degree wave with the minimum duration for a complete Primary degree cycle being few months, this Primary Wave 2 correction could last for weeks meaning stretches into November when its SxFi Air is scheduled to be released.
Added 2nd Oct 2018
The drop to intra-day low of $6.21 affirmed that on the 15-min chart the triangle correction pattern is incomplete. As such, the followings could be drawn from the 15-min chart after today performance :-1. The triangle pattern looks like a descending triangle given today low but technically speaking descending triangle is always followed by further down hence, the correction pattern might not turn out to be a triangle.
2. It could be an ending diagonal wave with now on the wave v, might break below $6.20 or rebound from here
On the daily chart, the pull back still on track of hitting the 61.8% Fibonacci Retracement level at $6.18 or even the 78.6% level at $5.96 to complete a typical zigzag pattern. As this is an Elliott Wave Primary degree wave with the minimum duration for a complete Primary degree cycle being few months, this Primary Wave 2 correction could last for weeks meaning stretches into November when its SxFi Air is scheduled to be released.
Added 3rd Oct 2018
Creative hit an intra-day high of $6.43 before closing at $6.38. Be it from 15-min, 30-min or 1-hour chart, still can't convincingly conclude the Minute wave 2 correction has ended. The $6.57 level should be a key level to determine whether the correction has ended. Elliott Wave correction always need patience !Added 4th Oct 2018
The SxFi App has been released on Google Play and believed the first batch of people who bought the dongle has started the personalization at Creative during the collection of the dongle. The correction pattern appears to be stabilized with a double-three combination of zigzag - triangle (descending) in the 1-hr chart.
The question now is wave e is it form today by doing an undershoot ? It could do an overshoot too meaning fall out of the triangle. The confirmation of wave e formed and the descending triangle pattern is none other than breaking out at $6.43. With news probably coming out on how people in general feel about its latest product Super X-Fi, any positive reaction could determine the breaking out and ended the correction. Technically, Elliott Wave allows a descending triangle pattern in a bullish trend though most of the time descending triangle is closely associated to down trend. If it really breakout and ended the correction, this should be the first time ever come across in practice a descending triangle breaking out to the upside. As this is a Minor degree Wave 2 correction, the first target is Minor Wave 3 and based on calculation, should hit around $8.51.
Added 8th Oct 2018
A 2 scenarios being developed for the correction on the 1-hr chart.
The Red descending triangle (a-b-c-d-e) showing a wave e overshoot. The Green descending triangle (a-b-c-d-e) showing a breakdown of the descending triangle. In Elliott Wave a descending triangle can be a bullish or bearish correction ie, after wave e either go up or down. Should the next few days price rebound move back up the into the triangle then it is biased toward the bullish scenario. Should no rebound then it is the typical descending triangle breakdown. Having doubt on the Green descending triangle as the wave c leg seems too short.
On the daily chart, no surprise as it clearly defined a typical A-B-C zigzag correction. Retracing to between 61.8% to 78.6% Fibonacci Ratio is very common for a wave 2 type of correction. the 78.6% Fibonacci level is at $5.95 while a wave C = 1.618 Wave B is at $5.97. Today intra-day low of $6.08 is just 3 bids off the 138.2% at $6.05. Appear like the correction is about there already. Now should the correction stop here, does that mean the Red descending triangle case on the 1-hr chart still valid ? If that case is true then this shall be the first real case that a descending triangle can turn into bullish upside, something that only came across in Elliott Wave theory.
Added 9th Oct 2018
Yesterday outlined 2 cases of the descending triangles and raise doubts on both. The bullish case in which wave e was the overshoot after dropping to $6.08 raise the doubt that the overshoot is too much thus could be invalid. The bearish case, the breakdown of the descending triangle raise the doubt that wave c is too short, a very abnormal case. After analyzing today hourly chart and observe price action, there is another case that describe the triangle.
Wave c of the triangle could be hit yesterday at $6.08 or still forming as shown in the chart above. This is possible as given length of wave a was quite long. Based on this case, wave d yet to hit and wave e whether it will overshoot or just nice hit the boundary of the triangle shall be close to the 78.6% Fibonacci level at $5.95. This is something that is so annoying but challenging in analyzing Elliott Wave triangle pattern.
Added 10th Oct 2018
As of now, price hits intra-day low of $5.92, fallen below the 78.6% Fibonacci level, could be an early warning that the initial wave count is going to be invalid. Should that be true then it is still in the correction since hitting $10.
The blue label was the previous analysis in which it broke out of double-three combination of zigzag - triangle correction. Now, if the correction still ongoing, this will be the red labeled case. It is a big ascending triangle correction since fallen from $10. Wave a, b, c and d have formed and now is the wave e part. The $5.73 region could be where wave e is trying to form assuming no overshoot occur. Should it finding support at that price level, both wave count are considered valid as there is no rule violation for the initial wave count. However, if price drop below $5.66, the initial wave count will be invalidated.
