The last time I took a look at Datadog was a few months ago back in Feb 2022. At the time, I was looking for a bit more downside before resuming higher. You can view this article here. As reminder, Datadog is an observability service for cloud-scale applications, providing monitoring of servers, databases, tools, and services, through a SaaS-based data analytics platform.
I was favouring that the low set in Jan 2022 was set. however, the market still was looking to keep correcting the cycle from May 2021. Lets take a look at the chart from February.
DataDog Elliottwave view Feb 2022:
Instead of remaining above the previous low set in ((2)), the market violated that low with a momentum divergence. This creates an incomplete bearish sequence pointing to lower prices. Lets take a look at the adjusted view below
Datadog Elliottwave View April 2022:
After bouncing from the blue box in January, Datadog had a sharp rally into (X). After that, another 5 waves down took place. On March 14/2022 a new low violated the prevoious low set in January 2022. As mentioned above, this creates an incomplete bearish sequence. It has momentum divergence, suggesting that more downside is still needed to erase the divergence. After Red A of (Y) found a low, another sharp bounce took place, now peaked in Red B. After that, the next leg lower is now favoured to have commenced. In order to comfirm this prices do need to make a new low below previous Red A.
We can now look lower to the next equal leg area, for where another bounce can take place. The next equal leg area is at 104.35. Prices need to remain above 69.79 in order for this nesting idea to remain intact.
Using proper risk management is absolutely essential when trading or investing in a volatile stocks. Elliott Wave counts can evolve quickly, be sure to have your stops in and define your risk when trading.
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