Potential 3rd Wave Extension om China A50

🕵️ Analysis on China A50 weekly chart:

📈 Dow Theory : After around 50% drop from its former peak, the index achieved its lowest low (LL) at 10,616.8. It then established two higher highs (2HH) and two higher lows (2HL), with the latest higher low being 12,599.1. From this perspective, the index has a high chance of continuing the uptred and reaching it's former high at 20,603.1.

🌊 Elliott Wave Analysis: During its downtrend, the index exhibited a clear W-X-Y formation, with each of the wave roughly equating 100% of each other. After its termination point, it rebounded with an impulse, followed by a zigzag correction. The correction removed around 80% of its former advance, then bounced back again and made a new high with strong driving force. Then, the price corrected below the peak of the first impulse, so it is assumed that the second impulse and correction waves are at one degree lower.

👉 Now, this environment sets for the event which Elliott wave analysts called a "third wave extension", meaning this rally could be exceptionally powerful, and thus could easily surpass the former peak itself. Using fibonacci extension on log scale, a potential price objective of 23,727.6 is projected.

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