easy · Elliott Wave Theory
A stock moves from 10 to 20 (Wave 1), corrects to 15 (Wave 2), and surges to 60 (Wave 3). After a sideways Wave 4 to 52, it rallies to 58 (Wave 5).
If this is a truncation, what does it imply about the strength of the preceding Wave 3?
- Wave 3 was actually weak, causing the fifth wave to fail early.
- Wave 3 volume was measurably lower than the volume seen in Wave 1.
- Wave 3 failed to reach its projected Fibonacci price extension target zone.
- Wave 3 was likely exceptionally powerful and exhausted the buyers.
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