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1. Momentum
Weekly time frame (W1)
– Momentum is still rising in the weekly frame.
Given the strength of the current weekly frame, there is a good chance that the uptrend will continue in the week ahead.
→ The mid- to long-term trend remains bullish.
Daily time range (D1)
– Daily momentum remains in overlapping compression.
– This reflects continued buying power and the fact that the uptrend has not yet been broken.
Time range 4 hours (H4)
– H4 momentum is rising but has entered the overbought zone.
– This indicates that a correction or bearish reversal in the H4 framework is likely in the coming period.
2. Wave structure
Wave structure on perimeter frame (W1)
On the weekly chart, we clearly notice the Wave 5 Extension.
This stage is a transition period controlled by herd mentality.
– While the long-term trend remains bullish, the main problem right now is that the volatility is very high:
– A candle on the H4 frame may move 400-500 points,
– This makes actual trading more difficult.
→ At this stage, monitoring is more important than intensive trading.
– The next danger is that herd behavior becomes extreme.
When market psychology returns to equilibrium, countermovements are often surprisingly swift and strong.
– On the other hand, weekly momentum still needs at least a week to move into extreme overbought territory and possibly reverse.
→ Therefore, the overall upward trend is still likely to continue.
Wave structure on the daily frame (D1)
– On the daily frame, the blue five-wave structure is still valid and advancing.
The current blue fifth wave is witnessing a very strong extension.
– The rise is likely to continue as daily momentum continues to overlap,
But at the same time, the risk of a reversal of momentum in the daily frame is also increasing.
Wave structure on the 4 hour frame (H4)
One of the fundamental weaknesses of Elliott’s theory occurs when price is within an extending wave:
– It is difficult to determine the wave number with high accuracy during strong extension.
→ Therefore, the wave numbers on H4 at this stage are relative and are for observation purposes only.
For a more accurate assessment, you must rely on:
– the depth of price corrections,
– the time required for correction,
– Momentum behavior.
– By monitoring H4 momentum, we note that the slowdown in upward momentum within the overbought zone indicates that the uptrend is starting to lose strength.
→ This increases the possibility of entering a sideways movement or a bearish correction on the H4 frame.
However, when looking at the RSI indicator:
We find that the current overbought zone is stronger than the previous zone.
– This suggests that the upside power needed to reach new record highs still exists,
– At least until a new peak forms, accompanied by a negative breakout (bearish divergence).
3. Trading strategy
Based on the current situation, the most appropriate strategy is still:
👉 Look for momentum reversals on the H1 and H4 frames to enter a buy trade in the main trend.
– For now, we need to be patient and wait for H4 momentum to return to the oversold zone.
– Next, we continue to monitor the H1 frame in order to:
– determine the structure of waves,
– confirm momentum,
– Set appropriate price targets for buy trades.
Why are we waiting to buy rather than sell in the oversold territory of Q4?
– Because the current uptrend is very strong.
Corrective actions at this stage may be:
– Occasionally, or
– Bearish, but unclear the extent of the decline.
→ Therefore, selling carries a high level of risk and uncertainty.
👉 Waiting for H4 to reach the oversold zone helps:
– Create clearer trends on H1 framework,
– Enter buy trades based on the larger trend and perform better risk management.
