CBA 1.16% $85.79 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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