$ASX Forecasting The Rally After Elliott Wave Zig Zag Pattern

Hello fellow traders. In this technical blog we’re going to take a quick look at the Elliott Wave charts of  $ASX published in members area of the Elliottwave-Forecast . As our members know, $ASX is showing incomplete bullish sequences in the cycle from the December 2018 low. Consequently we recommended members to avoid selling the Index and keep buying the dips in the sequences of 3,7,or 11 swings , whenever opportunity presented itself. Recently $ASX corrected the short term cycle from the  3rd December low. Pull back unfolded as Elliott Wave Zig Zag pattern. After the pull back completed we got expected rally when the Index made new highs. In further text we’re going to explain the forecast and Elliott Wave Pattern.

Before we take a look at the real market example, let’s explain Elliott Wave Zigzag pattern.

Elliott Wave Zig Zag Pattern

Elliott Wave Zigzag is the most popular corrective pattern in Elliott Wave theory . It’s made of 3 swings which have 5-3-5 inner structure. Inner swings are labeled as A,B,C where A =5 waves, B=3 waves and C=5 waves. That means A and C can be either impulsive waves or diagonals. (Leading Diagonal in case of wave A or Ending in case of wave C) . Waves A and C must meet all conditions of being 5 wave structure, such as: having RSI divergency between wave subdivisions, ideal Fibonacci extensions and ideal retracement.

At the graphic below, we can see what Elliott Wave Zigzag structure looks like. 5 waves down in A, 3 waves bounce in B and another 5 waves down in C.

Now, lets’ take a look what Elliott Wave Zigzag looks like in the real market.

$ASX 1 Hour Elliott Wave Analysis 1.05.2020

As we can see on the chart, short term cycle from the 6588.9 low ended as 5 waves rally- A red. We got 3 waves down in wave B red pull back. Pull back unfolded as ((a))((b))((c)) Elliott Wave Zig Zag pattern. First leg ((a)) has made of 5 waves. Then we got 3 wave bounces in wave ((b)).  Last leg down- wave ((c)) also unfolded as a 5 waves structure. At this moment we are labeling Zig Zag completed, calling further strength in the Index as far as the price stays above B red-6668.6 low. We would like to see further separation from the mentioned low and ideally break above A red peak ( 6873) to confirm next leg up is in progress.

You can learn more about Zig Zag Elliott Wave Patterns at our Free Elliott Wave Educational Web Page.

$ASX 1 Hour Elliott Wave Analysis 1.05.2020

6668.6 low held well and we got proposed rally as expected. Eventually the price has broken above A red peak ( 6873) confirming next leg up is in progress. Proposed break made cycle from the 15th August low incomplete as well. We expect further strength in the Index within proposed August cycle.

Keep in mind that market is dynamic and presented view could have changed in the mean time.  You can check most recent charts in the membership area of the site. Best instruments to trade are those having incomplete bullish or bearish swings sequences. We put them in Sequence Report and best among them are shown in the Live Trading Room.