HOT TOPICS LIST
- MACD
- Fibonacci
- RSI
- Gann
- ADXR
- Stochastics
- Volume
- Triangles
- Futures
- Cycles
- Volatility
- ZIGZAG
- MESA
- Retracement
- Aroon
INDICATORS LIST
LIST OF TOPICS
PRINT THIS ARTICLE
by Koos van der Merwe
It is very satisfying when a stock follows a perfect Elliott wave count.
Position: Sell
Koos van der Merwe
Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.
PRINT THIS ARTICLE
ELLIOTT WAVE
A Perfect Count For Aruba
11/01/11 10:15:08 AMby Koos van der Merwe
It is very satisfying when a stock follows a perfect Elliott wave count.
Position: Sell
| Aruba Networks (ARUN) completed a perfect Elliott wave count on August 19, 2011, within the fourth wave of lesser degree, as shown on the weekly chart. From that date, it rose to a high of $25.55. |
|
| FIGURE 1: ARUN, WEEKLY |
| Graphic provided by: AdvancedGET. |
| |
| Figure 1 is a weekly chart of ARUN and shows how the share price started its wave count from a low of $1.98 on November 2008. The share price rose steadily in a perfect Elliott wave count to reach a high of $36.52 by May 6, 2011. It then dropped in an ABC correction to a low of $16.39 by August 19, 2011, which was within the fourth wave of lesser degree as shown on the chart. Note too how the relative strength index (RSI) moved into the buy zone and gave a buy signal on that date. The price has since moved up, testing the 61.8% retracement level of the fall of wave C from $31.37 to $16.39. This does suggest that a wave 1 of a new bull market has been completed, and that we could see a correction down. |
|
| FIGURE 2: ARUN, DAILY |
| Graphic provided by: AdvancedGET. |
| |
| Figure 2 is a daily chart of ARUN and shows the low of wave C at $16.20 and the rise in a wave 1 to $25.64. If this is indeed the high of wave 1, and the RSI at overbought levels is suggesting that this could indeed be the case, then we should see a fall to anyone of the Fibonacci levels shown. Wave 2s can retrace 100% of a wave 1, with a 72% retracement being the most common, as short-sellers believe the negative trend is continuing. I would not be a buyer of ARUN at present levels, even though the share price could move higher. I will, however, wait for the share price to complete a wave 2 down, using the 14-period RSI to give me a buy signal. This will take the price into a wave 3 up, with excellent profits. |
Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.
| Address: | 3256 West 24th Ave |
| Vancouver, BC | |
| Phone # for sales: | 6042634214 |
| E-mail address: | petroosp@gmail.com |
Click here for more information about our publications!
PRINT THIS ARTICLE
|
Request Information From Our Sponsors
- StockCharts.com, Inc.
- Candle Patterns
- Candlestick Charting Explained
- Intermarket Technical Analysis
- John Murphy on Chart Analysis
- John Murphy's Chart Pattern Recognition
- John Murphy's Market Message
- MurphyExplainsMarketAnalysis-Intermarket Analysis
- MurphyExplainsMarketAnalysis-Visual Analysis
- StockCharts.com
- Technical Analysis of the Financial Markets
- The Visual Investor
- VectorVest, Inc.
- Executive Premier Workshop
- One-Day Options Course
- OptionsPro
- Retirement Income Workshop
- Sure-Fire Trading Systems (VectorVest, Inc.)
- Trading as a Business Workshop
- VectorVest 7 EOD
- VectorVest 7 RealTime/IntraDay
- VectorVest AutoTester
- VectorVest Educational Services
- VectorVest OnLine
- VectorVest Options Analyzer
- VectorVest ProGraphics v6.0
- VectorVest ProTrader 7
- VectorVest RealTime Derby Tool
- VectorVest Simulator
- VectorVest Variator
- VectorVest Watchdog