The objective of every investor is to buy as early as possible at the beginning of every new, major up move. Establishing a target for Wave 5, then, is the most important aspect of Elliot’s Wave Principle. I have presented you with a chart of Google (Nasdaq:GOOG) Let me state at the outset that there are some major objections to the way I have labelled the chart. Instead of a 5-wave pattern, one could actually label this as a zig-zag correction. But either way, the 5-wave pattern from the top of 602 is in its final leg (or possibly already finished at 280). Once we agree on that, we have a frame of reference. After every 5-wave move, a correction has to take place, and because the 5th wave of the move from 602 has been an extension, we should see a move back to 452 in the coming weeks. Please make a note of the level somewhere, and the date and level when I am making this call. The pre-market level for Google today 17th Nov 2008 is 306. If this analysis is correct, we should be looking for a 47% move up in Google over the next few months. Since we are looking for a move of $146, we need to decide how much we can risk losing on any position. This is a personal decision for each investor. However, as a starting point, we should be willing to see a retest of 280 and potentially a move down to 267. Buying below 290 would be a low risk trade, in my opinion. However, how much to buy will depend on your own risk appetite. Let me know if you have any questions. Your best way to reach me will be via the comments. Good trading!
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Is Google in Wave 5?
By Ramki4 Comments2 Mins Read
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Thanks for your analysis, Ramki. I’m holding GOOG at $340, also waiting to buy below 290/280 if I get the chance. Otherwise I will be holding it for awhile. Very Helpful…thanks again.
Thank you for taking the time . To answer your question I dont know but your post will be the source of study.
I saw that the post “The Intelligent Investor” had picked up the 17 Nov post “Is Google in Wave 5?” as a related post. (don’t ask me why it did this!) Anyway, I ckecked out how GOOG had behaved after that post, where I looked for a potential low at 267 followed by a 47% recovery. The actual low was seen on 21 Nov at 247.30, and on 9 Feb we saw a high of 381, which is a 42% move from 267. Not bad. Unfortunately, like most of you, I did not put my money on GOOG because I was already exposed to some other markets. Sigh!
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