Triple 000 and Sub-penny Chart Plays

[trader53]

MONA 0.0018 - Elliott Wave #5

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Elliott Wave Basics
http://stockcharts.com/help/doku.php?id=chart_school:market_analysis:elliott_wave_theory

Basic Sequence

The chart below shows a rising 5-wave sequence.

The entire wave is up as it moves from the lower left
to the upper right of the chart.

Waves 1,3 and 5 are impulse waves
because they move with the trend.

Waves 2 and 4 are corrective waves
because they move against this bigger trend.

A basic impulse advance forms a 5-wave sequence.






Wave 1

The stock makes its initial move upwards.
This is usually caused by a relatively small number of people that all of the sudden (for a variety of reasons, real or imagined) feel that the price of the stock is cheap so it’s a perfect time to buy. This causes the price to rise.

Wave 2

At this point, enough people who were in the original wave consider the stock overvalued and take profits.
This causes the stock to go down.
However, the stock will not make it to its previous lows before the stock is considered a bargain again.

Wave 3

This is usually the longest and strongest wave.
The stock has caught the attention of the mass public.
More people find out about the stock and want to buy it.
This causes the stock’s price to go higher and higher.
This wave usually exceeds the high created at the end of wave 1.

Wave 4

Traders take profits because the stock is considered expensive again.
This wave tends to be weak because there are usually more people that are still bullish on the stock and are waiting to “buy on the dips.”

Wave 5

This is the point that most people get on the stock and is most driven by hysteria.
You usually start seeing the CEO of the company on the front page of major magazines as the Person of the Year. Traders and investors start coming up with ridiculous reasons to buy the stock and try to choke you when you disagree with them. This is when the stock becomes the most overpriced. Contrarians start shorting the stock which starts the ABC pattern.



Extended Impulse Waves

One thing that you also need to know about the Elliott Wave Theory is that one of the three impulse waves (1, 3, or 5) will always be “extended”. Simply put, there will always be one wave that is longer than the other two, regardless of degree.

According to Elliott, it is usually the fifth wave which is extended.

http://www.babypips.com/school/summer-school/elliott-wave-theory/the-5-3-wave-patterns.html





Live! Charts

http://stockcharts.com/h-sc/ui?s=MONA&p=D&yr=0&mn=3&dy=0&id=p55917898888