Hangseng decline from 10.26.2021 peak is in 5 waves. As per Elliott wave theory, after a 5 waves decline, there should be a 3 waves recovery following which the decline should resume unless 5 waves decline formed part of an Elliott Wave FLAT. Chart below shows structure of the 3 waves recovery and also highlight the inflection area where it is expected to complete.
Hangseng 9 January 1 Hour Weekend Update
Chart below shows wave (1) completed at 22665.65 and wave (2) is unfolding as a . Wave ((i)) of A completed at 23258.71, wave ((ii)) of A completed at 22990.24, wave ((iii)) of A completed at 23590.12, wave ((iv)) of A completed at 23394.77 and wave ((v)) of A completed at 23605.03. This was followed by a double three correction in wave B which completed at 22709.60. Up from there, wave ((i)) of C completed at 22886.50, wave ((ii)) of A completed at 22751 and wave ((iii)) of C is in progress. Chart shows an inflection area of 23655.35 – 24240.57 which is based on 100 – 161.8% Fibonacci extensions of wave A related to wave B. We have highlighted this with a blue box.
Blue Boxes are High-Frequency areas which are based in a relationship of sequences, cycles and calculated using extensions. We refer to them as High Frequency trading areas, we prefer blue boxes to enter in direction of the trend because blue Boxes are areas where majority of the times, both buyers and sellers again in direction of next move for 3 swings at least and hence why they present high probability / low risk areas to enter the market in direction of the trend.
Hangseng 10 January 1 Hour Update
Chart below shows Hangseng went on to break above red A peak and has already reached the 100% Fibonacci extension of wave A related to wave B. It can see more upside within the blue box which extends up to 24240.57. As far as price stays below 24240.57 (161.8% Fibonacci extension), we expect the decline to resume in wave (3) or 3 waves reaction lower at least to take place to correct the rally from red B low.
A break above 24240.57 would indicate the rally from the low can extend and become a possible 5 waves move up which could be just wave A of a larger 3 waves recovery or be wave C of a FLAT correction from November 30, 2021 low (23175.37)
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