DOW bullish (1st higher low set up)

by Gary Glover

The strong volume near the low was a sign of exhaustion at the time and a strong 4 week rally unfolded which took the stock from $3.33 to $5.02. 
The ideal set up is to see price pullback the same number of weeks and not go to a new low and hopefully hold above the 50% or 61.8% retracement level.  Volume should contract and be considerably less than the previous four week rally.  Bingo, this is exactly what has happened. 
Following the 4 week rally, it’s very common to see equilibrium in time here so a pullback that lasts the same duration as the rally is the most common set up and the ideal time to go long.  All the conditions for a strong rally are in place.  If we use a 3 wave advance as our minimum target then we get a target of $5.50-$5.60.


Disclaimer

Gary Glover is an Authorised Representative (Rep No. 259215) of Novus Capital Limited ("Novus"). Novus is a holder of Australian Financial Services Licence No 238 168. Novus, its directors, officers, associates and employees each declare that they, from time to time, may hold interests in financial products and/or earn brokerage, commission, fees or other benefits from financial products mentioned in this e-mail or attached documents. Unless specifically stated within this page or an attached document, any information communicated by this e-mail constitutes unsolicited general financial product advice which has been compiled without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particular investor. Before making any decision about the information provided, you need to consider the appropriateness of this information having regard to your individual objectives, financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you, particularly if based on past performance or relate to a future matter.