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Silver(XAGUSD) has formed a downtrend channel for more than 48 weeks. Price has made a high of 30.03, and sellers entered the market.
Price Action Perspective:
Price has made a series of Lower Highs and Lower Lows, and the control line gives nine touches.
According to Dow theory, if the price breaks the previous LL, it will make a new LL. The upper band & lower band has provided strong reversals to the price.
After breaking the LL, if the price gives a breakout of the downtrend channel, it indicates the worst fundamentals. And if the price gets reversed to create the lower band of the downtrend channel, the price will march to the upper band touch.
Elliott Perspective:
Price has constituted a corrective structure, where price has completed double zigzag(w-x-y).
It will create the last leg wave Z in order to complete the Triple correction. After making the last leg Z, silver will start a five-wave impulsive wave.
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XAUUSD is forming a triangle on the wave ((4)).
This correction has taken more than 17 months, but the triangle is not over yet. Price has completed wave D of the 4th wave triangle, and wave E of wave A is in progress.
After completing the wave sub-wave A, the price will start wave B & then wave C.
The ending point of wave E is the starting point of the impulsive cycle.
Calculation of wave E:
Wave E can end 100% of wave sub-wave A at 1726.
Wave E can end near previous sub-wave B at 1719
Wave E can end at 100% of wave D at 1704.
Traders can wait for the breakout of the B-D trend line. Note that if the price doesn’t break the B-D channel, sideways will be continued.
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It looks like mother Sumi has completed the 4th wave correction, and the ending point of the corrective wave (4) is the starting point of wave (5).
Wave formations:
Waves W is a zigzag correction pattern.
Wave Y triangle.
Wave X could form any correction pattern.
Wave X is smaller than wave W & Y.
Rules and objectives:
1. Double three is a corrective structure that includes more than one type of corrective pattern.
2. It consists of three waves, which are marked W-X-Y.
3. A triangle may occur only as wave Y in a double three.
4. In most cases, double threes are not deep corrections.
5. wave Y usually ends at 100% – 161.8% Fibonacci extension relative to wave W.
6. Wave Y should not go below the 161.8% Extension of Wave W. It shows that the corrective trend is strong.
What are the double threes?
Price picks up momentum when it starts an impulsive wave.
After accomplishing the impulsive wave, it corrects the previous move by a three-wave pattern.
These three waves were not enough to complete correction because of the high momentum & directional power of an impulsive wave.
Price creates another three-wave move to complete the correction by merging through intermediate wave X.[b][/b]
Let me make it easy by explaining and structuring examples.
Double three Structure:
How to labialize it?
Real Example:
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Before:
Alembic was forming in the downtrend channel. The price had completed a double zigzag of primary wave ((4)).
According to the Elliott wave principle, the ending point of the corrective structure is the starting point of the impulse.
I mentioned, “if the alembic breaks up the ending diagonal, it is supposed to reach the targets of 114-123-139 and more.
Click here to read previous research report.
However, the price must confirm the trend by breaking the wave (X).”
After:
Alembic has broken the 4th wave of the ending diagonal, and price got momentum as the 5th wave is the termination wave of the ending diagonal.
12:20 PM,4 January 2022– Alembic pharma reached the first target of 114.
Alembic pharma will retrace on the support trend line, and it will start marching for the 2nd target targets.
Before:
AB capital was undergoing the complex correction of the corrective wave ((iv)). Complex correction W-X-Y accomplished at 96.35 and made a higher low.
Successive highs and lows indicate the starting of an uptrend.
In my previous article, I had written in bold words,” We can see the following targets:
127.70
138.96
151.2
165.9+
Invalidation: breakout of the minor channel”.
Click here to read the previous article.
After:
1:20 PM, 3 January 2022, price broke the high of wave (i) and moved out of the minor parallel channel.
AB capital reached the first target of 127.70 and made a high of 132.55.
If the price gives a strong close above wave X, it’s a good signal for bulls.
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Before:
CADJPY was forming a last impulsive wave 5 of primary degree.
It had completed the corrective structure, running flat.
After accomplishing the C leg, the price surged from 87.48 to 90.
Price was above 50-MA, which was the indication of a strong trend. It was a beginning of a new impulsive move. I found that the price can make a big move up to 93.84.
As I mentioned in my previous article, “We can expect the following targets 91.46-92.29-93.849“.
Click Here to read the previous research report.
After:
Price broke the 50-MA & minor resistance of 90.382.
Yesterday, CADJPY reached the first target of 91.46 and made a new high of 91.667.
Although the price is gaining momentum, it never moves in a straight line.
It will create a series of highs and lows to create an uptrend.