This will be another interesting chart to watch in coming months.
cohodk
Posts: 19,102 ✭✭✭✭✭
cohodk
Posts: 19,102 ✭✭✭✭✭
Comments
Glen
Besides bouncing off the uptrend line recently it also rebounded off the support line formed by the March 2009 and Nov 2010 bottoms. That support line
was acting sort of as a secondary neckline to the larger cup formation. By going back to retest the area of the 4th qtr of 2010 of accomplishes the task
of adding more symmetry to balance that dip formed in the 1st qtr of 2008. 4th qtr of 2010 was also the 3-4 leg of the 2nd 5 wave set (June 2010-March 2011).
Retraces often go back and retest the 3-4 leg dip of the previous 5 wave set. So far it looks like CCI has performed 2 perectly formed 5 wave sets since Nov 2008.
The overshoot in 2011 sort of messed up the overall symmetry which it is correcting now. The current bounce is now fighting resistance formed by the neckline
of the 614.57 (June 2008) and 603 (Nov 2010) tops.
Another way to look at the formation is as a "slanted" cup. There's much more overall symmetry involved now. The retest/cup handle has gone deeper down the cup
to retest the last 3-4 Elliott wave area (550-600). Note also that the recent drop respected the upper half channel lower line formed by the 398, 408, 425, and 504 highs as well as
the recent 563 bottom.
From either perspective everything still fits for the bullish cause. A breakdown of any of these channels, support and uptrend lines will change the picture. Nothing says
that CCI couldn't spend a year or so back in the lower half channel again (400-550) as it did in 2009. But if I had to pick 'em today, I like the bullish case with how the
lines and EWaves still line up. A drop to no lower than 504.71 could be withstood and still support a bullish case. A break of that 3 yr uptrend line will scatter a lot of bulls.
The recent bounce off the 50% Fib level and 3 yr uptrend line has also reached the 38% Fib level. The 61% Fib level sits lower at 542.
roadrunner