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momentum
– Momentum on the daily frame (D1) is currently trending lower. The market may need an additional 1-2 daily candles to push into oversold territory, and then a daily bottom may form.
– Momentum on the 4-hour frame (H4) is currently trending higher. Therefore, in the short term, the price is likely to continue rising or move sideways during the next 1-2 H4 candles.
– Momentum is declining on the hourly chart (H1). Therefore, the price on the H1 frame may experience additional downward movement or sideways movement during the next 2-3 H1 candles (including the current candle).
wave structure
Wave structure on D1
The current structure still supports a situation where the downside is trying to complete the top of the B-wave. Today or tomorrow we hope to see another strong downward wave to reinforce this scenario.
This is because the momentum of D1 is approaching the oversold zone, and when it reaches the oversold zone, the possibility of a daily bottom increases. After a bottom is formed, any subsequent weak declines may easily be offset by a rebound to the upside.
Wave structure on H4
When H4’s momentum begins to reverse upward, two possible scenarios arise, with roughly equal wave numbers but different directions.
first scene
– Downward movement develops in a 1-2-3-4-5 structure
– Price is currently within the wave 4 target area
If H4 momentum rises into overbought territory, and price continues to trade sideways around this area, we may see another strong bearish wave, forming Bearish Wave 5, when H4 momentum reverses downward.
Second case
– If the price rises strongly, the previous bearish structure may just be an ABC correction of the W wave
– The current upswing will be a corrective wave X
– Thereafter, the market may continue to decline in the Y wave, forming a WXY correction structure.
Wave structure on H1
Looking at the structure on the H1 frame, I suggested two possible wave counting scenarios and marked them on the chart.
There is an important liquidity area on the chart highlighted in yellow.
– If price stabilizes above the 5143 level when H1 momentum enters oversold territory and H4 momentum has not yet reached overbought, we may get a very good short-term buy signal.
However, if the H4 momentum moves into overbought territory, and the H1 momentum also returns to overbought, while the price remains around the 5204 level, a sell trade (SELL) could be considered.
– If the price rises strongly and closes above the 5204 level, the market may continue its rise towards the 5287 area.
trading plan
With Q4 momentum currently on the uptrend, the preferred option is to look for buy (BUY) opportunities.
I would wait until price is close to the 5143 area, while having to be patient until the first half momentum gets into at least oversold territory before opening a position.
Buying area: 5145 – 5143
Level: 5123
TP1:5204
TP2:5239
TP3:5280
