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1. Momentum
Weekly Momentum (W1)
– Weekly momentum is currently showing early signs of a bearish reversal.
– However, we need to wait for the close of this week’s candle to confirm this reversal.
– If the reversal is confirmed, the market may enter a bearish or sideways phase for at least a few weeks.
Daily Momentum (D1)
– Daily momentum is currently in an uptrend, indicating the potential for a continuation of the uptrend or consolidation in the coming days.
– Something worth noting: If D1 momentum moves into overbought territory without price making new highs, this would be a strong signal that the long-term downtrend is still alive.
H4 framework power
– H4 momentum is currently in oversold territory and is preparing for a reversal.
– This indicates a high probability of a bullish reversal in the H4 framework today or soon.
2. Wave structure
Wave structure on perimeter frame (W1)
– On the weekly chart, the five-wave structure (1-2-3-4-5) has been completed and the price is currently in a correction phase.
With weekly momentum likely to reverse to the downside, this corrective move is expected to continue for at least a few weeks if confirmed.
Wave structure on the daily frame (D1)
– On the daily frame, a sharp and rapid decline manifests itself as a five-wave structure representing Wave A.
The current uptrend is considered Wave B.
Wave B usually has a complex structure, so at this stage you should focus on monitoring the momentum of D1 and H4 in combination with expected price targets to determine the end area of wave B.
– The completion of wave B will be confirmed when the price reaches the target zone while the momentum of D1 and H4 enters the overbought zone and begins to reverse.
3. Wave structure on H4 frame
– On the H4 frame, wave A has been completed (black) and the price is currently forming wave B.
– The continued rise in daily momentum suggests that the uptrend may continue for a few more days, and H4 momentum is preparing to reverse to the upside.
– This supports the case that wave B is still ongoing.
– B-waves may consist of at least a triple ABC structure (red).
Currently, the price may be located within the red wave B, in which we note the formation of three sub-waves.
Price may now be in a blue C wave.
The main goals of the blue C wave:
– 4827: where wave C is equal to the length of wave A
– 4640: where wave C is equal to 1.618 of wave A, corresponding to a region of strong liquidity
I expect the price to drop to the 4640 area looking for buying opportunities.
4. Trading plan
– Currently, the range of candles is very wide, which makes it difficult to set a stop loss and requires a larger distance to avoid being beaten prematurely.
– Therefore, rigorous risk management is crucial.
– Small accounts: Maximum risk per trade is 5%
– Large accounts: Maximum risk per trade is 3%
Transaction settings:
– Buying area: 4642 – 4640
– Stop Loss (SL): 4600
– First goal (TP1): 4827
– Second target (TP2): 5105
– Third target (TP3): 5244
