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The bears took a tough punch final week. Nonetheless, bulls usually are not in management but. Traders will in all probability must handle a retest of the January lows.
Extreme bearish sentiment and oversold circumstances triggered a pointy rally over the previous week. Bears have been squeezed because the buy-the-dip crowd smelled a chance. Subsequently, patrons retracted nearly half of the current correction.
Nonetheless, one other assault at 4245 is probably going. The current selloff recovered from complete momentum on nearly any technical time scale. Furthermore, the sentiment was bearish however not in panic mode final week. Most frequently, comparable circumstances resulted in one other leg simply barely decrease.
Subsequently, a capitulation selloff is the bottom case. Bulls wish to see that on diverging momentum and breadth. The black and purple eventualities blueprint how that might play out. Black reaches a barely decrease low after a fourth wave consolidation.
Alternatively, purple fails to get to a decrease low. As an alternative, a reversal unfolds someplace between the 4300-4400 S/R cluster, which coincides with the 200 DMA. Pink is barely extra probably, and a bullish five-wave sequence indicators inside an Elliott Waves framework that the late January low holds.
Final however not least, each eventualities blueprinted right now get invalidated if momentum persists within the subsequent selloff and 4220 breaks sustainably. The underside line is that the stays prone to goal 5000-5200, regardless of a bumpy street forward.
Disclaimer: Data solely. No recommendation.
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