AMLN details AND Understanding Fibonacci Retracements

How to view the entire chart:


1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.


I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.


I Hope this helps,


Juan

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The most successful trades in the Challenge, AMLN was a testament to the Elliott wave count, and the patience and discipline required to profit from it. Today, AMLN is correcting, after a good bull run. Let's take a look at AMLN complete analysis. Starting at the lows of 2002. AMLN, like many other stocks, are not showing impulsive behavior after the lows of 2002, but rather, they many show double zigzags (dz), which are quite bullish, nevertheless.

A dz takes the form a-b-c-x-a-b-c, that can in turn be simplified as w-x-y. To be more specific, we could label the components of wave "w" as a1-b1-c1, and the components of "y" as a2-b2-c2. If our count is correct, AMLN is currently in wave "b2" of the larger zigzag. Once "c2" is complete, "y" will be completed and the dz will be done. As "b2" is in progress, its conclusion will be the beginning of another powerful wave UP, which we could profit from. According to the chart below, "y" should conclude somewhere between $38.5 and $60.4. Our job is now to call the end of "b2" to enter a bullish position in time for "c2".



A Fractal is a geometric pattern that is repeated at ever smaller scales to produce irregular shapes and surfaces that cannot be represented by classical geometry. Fractals are used especially in computer modeling of irregular patterns and structures in nature.

The pattern of the AMLN chart starting in June 2005 (see below), as it often happens in Elliott wave counts, is a fractal of the long-term chart above, and could help us to envision what to expect for AMLN in the weeks to come, so we can be ready for the beginning of "c2". We can also illustrate the importance of the Fibonacci retracement strategy. If this count is correct, AMLN is still progressing through a corrective wave "Y" that should end between $25-$32. Note how the minimal retracement would be 32.8% (labeled 61.8% in the chart below). If AMLN was to fall below $25, then my count would be invalidated in favor of a FLAT, which could reach $15 or below. IF AMLN was to fall below $25, we could not expect it to begin the bull run "Y" I talked about for the long-term chart and that count would be invalidated.

Note also in the chart below how the oscillators are still pointing down, so that my target is likely to be reached. I am presuming that the oscillators will give me appropriate BUY signals once the bottom of this intermediate term "Y" (in light brown color) is completed.

Looking at the very short pattern that began in early October, a double 3 (d3), wave "(y)" (in magenta) should complete shortly. BUT, can we have a more accurate count for the end of (Y)? See the short-term count in the third chart below.



the (Y) wave in the chart above is likely a zigzag. You'd see this labeled as (ZZ) below. Wave "(C)" of this zigzag is in progress and should finish between $27.5 and $32.33, but could go as low as $20. Our job is to now await the completion of this series, and to look for buying signals from the oscillators, and perhaps a relevant reversal candlestick pattern.