0.01% \$87.13 commonwealth bank of australia.

# cba wave 4c underway?

1. 436 Posts.
hi kiddies,

CBA looks to me like it's trying to do Wave C of Wave 4 just now. The chart shows the general lay of the land. Waves so far are:

Wave 1: \$23.05 - \$27.90
Wave 2: \$27.90 - \$26.26
Wave 3: \$26.26 - \$30.62

Wave 4a: \$30.62 - \$28.90
Wave 4b: \$28.90 - \$30.14
Wave 4c: \$30.14 - ?

This assessment of Wave 4 has it composed of 3 subwaves (a, b & c). Wave 4a is a 3-wave flat from \$30.62 - \$28.90. Wave 4b is an ascending triangle from \$28.90 - \$30.14 (other interpretations are possible... the ascending triangle would be particularly tidy here because triangles always come second to the last wave in the next larger strucuture - ie, the following wave, Wave 4c, should complete the whole Wave 4 structure).

Wave 4c started at \$30.14 and should get below the beginning of Wave 4b @ \$28.90 in order to complete itself and Wave 4 overall.

Obviously, if CBA now goes above \$30.14 before getting back under \$28.90, the whole assessment of Wave 4 so far is wrong. An alternative would be that Wave 4 already completed at \$28.90 (this is the 38.2% retrace of Wave 3), although the structure after that point doesn't look much like the beginnings of an impulsive Wave 5 up...

For the purposes of this assessment, Wave 4 has to finish somewhere between \$28.90 and \$27.90, because 1) Wave 4 has to finish below the start of Wave 4b @ \$28.90 to be valid, and 2) Wave 4 can't encroach upon the territory of Wave 2, so must not go below \$27.90.

In order to take a guess at where Wave 4c might finish, the following ratios give some possible endpoints (values clearly beyond the permissible ending range for Wave 4 are dismissed):

Wave 4 = 21.4% x Wave 3 @ \$29.63 --- invalid
Wave 4 = 38.2% x Wave 3 @ \$28.88
Wave 4 = 50.0% x Wave 3 @ \$28.36
Wave 4 = 61.8% x Wave 3 @ \$27.85
Wave 4 = 78.6% x Wave 3 @ \$27.14 --- invalid

Wave 4c = 078.6% x Wave 4a @ \$28.80
Wave 4c = 100.0% x Wave 4a @ \$28.45
Wave 4c = 138.2% x Wave 4a @ \$27.80
Wave 4c = 161.8% x Wave 4a @ \$27.45 --- invalid

Based on this lot, I'd say there's a good chance that CBA will get down to ~\$28.45 or so, and a tangible possibility that it may even push the envelope all the way down to \$27.90 (without breaching that level).

What I'd like to know is how the upcoming dividend is going to affect CBA's price. It seems to me, with my expectation for a local low for CBA in the first two weeks of September, that Wave 4c might just bounce around a bit for a few weeks before finally posting its endpoint. The dividend might be the trigger for a couple of weeks of volatility.

And then again, I could be wrong. This whole assessment of Wave 4 will be proven incorrect of CBA goes above \$30.14 before getting back under \$28.90...

Critical thoughts welcomed.

Regards,

Ultrafart.

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