PSO PROBABLY IN WAVE '5' or '4' - LONG

PSO is most probably in wave 5 of 3rd wave which can be an ending diagonal or impulse wave.
As the 3rd wave was a big extended wave, 5th wave should not extend and will not make a significant move up.
Volume divergence should also appear between 3rd and 5th wave, further breakup of wave 5 of 3rd: if the count is correct then wave 1 is completed and prices will retrace back to trendline marking wave 2 and only then move forward up.

Alternate count is that we are still in 4th wave, as 4th waves can be any corrective pattern it is not wise to mark them as completed until we see further confirmations. In 4th wave we are in wave B which also can be any corrective pattern.

Our preferred wave count is 5th wave up which will provide a buy opportunity once price retrace back.

Note: We are not trading this move because we already have MARI and POL moves at our hand which are showing more promising returns and have better fundamentals then PSO at the moment.

Feel free to comment and share your thoughts if you like.

Let see how this plays, Good Luck !

Disclaimer: The information presented in this wave analysis is intended solely for educational and informational purposes. It does not constitute financial or trading advice, nor should it be interpreted as a recommendation to buy or sell any securities.

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Although we are not trading PSO at the moment, I would like to show traders how divergence work with wave count.

In the below chart you can see that price made higher highs, however the volume is declining showing weakness in upside and indicating prices will retrace down. But it does not ensure that upside is over, a couple of high volume bars and we are back on the upside track.

But higher probability is prices will retrace down.

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Update:

I've just identified a trade setup that PSO is building, If my count is correct and this further develops as I'm anticipating then its gonna be heck of a profitable trade.

Risk/Reward would be: 3.42 to 5.45

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Good morning everyone, hope you had a great weekend :)

PSO prices have been consolidating from the past 3 days and have not retraced back as anticipated yet. The divergence between price and volume is still there which means that either prices will retrace back within this week or prices will keep on consolidating sideways until the significance of volume divergence disappears.

As mentioned earlier, we were not interested to take trades in PSO due to its fundamental strength compared to POL and MARI, however if the wave count is correct. we will take small portion of position in it.

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Update:

Prices have started to decline now, if our wave count is correct prices should reach 370 - 350 area which is our buy zone. Although the risk/reward ratio in this trade setup is great but as mentioned earlier we will only take small portion of positions in it, we do not want to put all our eggs in one basket and let the greed takeover us.

Trade Setup:

Entry price: 370-350 ( eyeing 360 )

Stop Loss: 322

Target: 515 - 535 area range

Risk/Reward Ratio: 3.77

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Update:

Prices retraced back yesterday upwards indicating that impulse wave has not finished yet and might get extended in which case prices will have to break above 427. If price break above the 427 then we will have to remark our count which will modify our trade setup.

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Update:

Prices have moved up which means we have to remark our wave count and amend our trade setup accordingly.

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Update:

I have revisited my wave count and have brought back my alternate count in the picture as well, now if the impulse wave needs to be extended then price should not go below 398.50. If prices go below 398.50 it will invalidate the black impulse wave count confirming an ABC correction.

Alternately prices might still be in wave 4 and the wave 5 has not yet started.

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Update:

Prices have fallen below 398.50 providing confirmation for our ABC correction count, our entry price level is same eyeing 360 here, however cautious way to trade this setup is to wait for the bounce from the yellow trendline.

As mentioned earlier we will only trade a small portion of investment in PSO as its fundamentals as per our limited knowledge are not strong enough compared to POL & MARI

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Update:

Prices are nearing the yellow trendline and should touch 355-350 range, let see if the price holds this support and reverse giving confidence in our wave count.

7 days ago

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Update:

If our wave count if correct then we are in a minor 4th wave which is either completed or will complete in a couple of days after which prices should reach our buy zone area of 360.

We will not activate our buy trade once price reach 360-350 level and will wait for a bounce from the yellow trendline and if things unfold as predicted then we can enter long position using a swing trade setup which I will update accordingly.

2 days ago

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Update:

we are expecting price to reach our buy zone of 350-360 area today or tomorrow. Alternately if price do not reach 350-360 zone and start rising directly, then we will take a small buy position at 408 targeting 475 area.

yesterday

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Update:

Prices have started to rise and instead of targeting 475, we will play this trade cautiously and enter at 408 targeting 417 - 425 area first because our alternate wave count suggest that we might be in a B wave of a bigger ABC correction which will take as back down to our buy zone 350 - 360 as wave C.

We have been anticipating wave 3 of wave 5 for long positions which is still our preferred count and if this upward movement shows high volume when we reach 417-425 area, we will change our target to 475 again.

Volume is the key here, if this a B wave then volume will decrease as price moves up and if its a 3rd wave then the volume will rise and prices will move very quickly towards 475. We remain bullish on this on long term.

KayJay

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KayJay