I highlighted this stock early in Jan 2017 as a potential setup to buy after it completed a 5 wave advance. Fast forward and not only has it put in a 5 wave advance from the Jan 2017 lows, it has also pulled back like we wanted, however I would like to see a bit more downside towards 8.00 – 9.50 and a 7 swing decline from the Jan 2017 lows, that would offer a potential bullish setup.

Before

After

The key to this bullish setup is seeing a 7 swing move as we can label that as a double zigzag. Anything other than that, or if the next decline sees a move under 8.00 would potentially argue for an  alternative idea that I am tracking that could suggest new lows again under 6.50. Although for now I am favoring this double zigzag idea for wave 2.

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This stock got slammed from its recent earnings, it actually doubled its profits from the quarter before. Personally I think the move was a bit dramatic, but nonetheless the decline actually works out much better for those traders that are patiently waiting in the wings to pick this up for much lower prices. The current rally from the 2016 lows appears to be in 3 waves and fits perfectly for a large 4th wave of an impulse wave, that started from the 2013 highs.

I am working the idea of a large zigzag correction from the 2008 highs, so new lows would be wave [5] of a large C wave, ideally a move under $4.50 is seen to finally end this suspected impulse wave as well as end a larger zigzag pattern from the 2008 highs.

When you overlay Crude oil with this stock it does not take a genius to work out that until Crude oil puts in a major low, this stock is likely to be treading water and following Crude oil lower. Which incidentally would offer a great buying opportunity lower down once Crude oil finally puts in its respective 5th wave.

Stick this stock on your wish list as I think this could be a terrific buy once Crude oil finally puts in a major bottom and starts its ascent to much higher levels.

“It is always darkest just before the Day dawneth” – Thomas Fuller

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Many of the major US financial stocks I am currently tracking have this same look, I currently think its close to ending wave 3 of an impulse wave, so a significant pullback for wave 4 in 3 waves is favored soon, ideally a move towards 38.00 is tested. As long as any downside appears to be in 3 waves and holds above 34.00, then I like the idea of further upside and end a large 5 wave move that started from Feb 2016.

You can pull up many other financial stocks such as BAC, ZION, HABN, they have the same look from the Feb 2016, so I suspect the INDU will continue higher after a large pullback for wave [4] to around 19200.

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Since Donald Trump was elected as POTUS we have seen what the media is calling the “Trump rally” or “Trump effect”. No matter how you describe it, the facts are that rail road stocks have been a tear recently, once such stock that I am tracking is Norfolk Southern Corp (NSC).

This has a great looking pattern and I suspected its working an impulse wave, so we want to see 5 waves from the Feb 2016 lows before we turn bearish, although I do think its close to end wave 3, so some caution from the bulls is needed. Ideally a minor new high is seen followed a swift reversal back under 116.76, that should favor more weakness and suggest a correction for wave 4 is underway. A large 3 wave pullback towards 105.00 – 107.00 is a good area to end wave 4 and find buyers again to setup for a rally back to new all time highs for wave 5.

So if you own this stock it maybe prudent to put protective stops at 116.76. Overall I still favor more upside whilst its above 95.00 and favor a pullback in 3 waves to around 105.00 is likely a large 4th wave of an impulse wave that started from the Feb 2016 lows

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The rally from the lows in Oct 2016 counts well enough as an impulse wave (5 waves). Furthermore, when we look at the move in context to the move that started from the Feb 2016 lows, we can also count this recent 5 wave rally as a C wave of a flat pattern.

Short term above 107.75 keeps the market bid, but as its now met price and time, anyone bullish should now be a little cautious in case this is close to completion, although earnings are out in a week or so, thats always an outlier, but still a strong reversal back under 101.75 could be suggesting some weakness.

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