Since fiscal stimulus announced by China, JD started to print an expanding diagonal which I labeled in black as 1-2-3-4-5. Currently, wave 4 is over (or will be over within a few days) and wave 5, the longest in such a type of diagonal, is set to unfold.
Which supportive evidence I found:
I believe JD will revert with strong impulse up in the coming days.
See divergences:
Which supportive evidence I found:
- wave 4 is formed as a double three as (w)-(x)-(y) and (y) contains and ending diagonal - see green impulsive wave down. The diagonal's wave 5 reached the lower edge.
- wave 4 retraced 61.8% of wave 3
- wave can be seen as a bullish flag - it nicely fits into the channel (I showed in green)
- both RSI and MACD show bullish divergence with price on daily
I believe JD will revert with strong impulse up in the coming days.
See divergences:
Trade active
I was trying to find what can go wrong and found :)There is also an alternative waves count which assumes that deeper correction might take place. I labeled it with red. It means that the diagonal is over and correction structure of wave 2 might go beyond the level of the black count.
So accept the risk or join when trend up resumption confirmed. I will follow up on this.
Trade closed: stop reached
More complex correction unfolds as we can see so I admit the idea failed with the proposed analysis. This one more time tells you that indicators like RSI or fib retracements levels are useless when EW count alternatives still stay strong.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.