Hello Traders! Today, we will look at the Daily Elliott Wave structure of TransMedics Group Inc. (TMDX) and explain why the stock should soon reach a Blue Box area and react higher.
TransMedics Group, Inc., a commercial-stage medical technology company, engages in transforming organ transplant therapy for end-stage organ failure patients in the United States and internationally. The company was founded in 1998 and is headquartered in Andover, Massachusetts.
5 Wave Impulse Structure + ABC correction
TMDX Daily Elliott Wave View October 21st 2024:
The daily chart of TransMedics Group (TMDX) reveals key patterns based on Elliott Wave Theory. This analysis provides a roadmap for traders to plan their next steps effectively.
Breaking Down TMDX’s Recent Price Action
Since the February 2022 low, TMDX has followed a classic 5-wave impulse pattern, indicating a strong trend. Here’s what has happened so far:
- Wave ((1)) ended on July 19, 2023, marking the first impulse.
- Afterward, the stock pulled back in a 3-wave correction (ABC), eventually bottoming out at wave ((2)).
- TMDX then rallied once more, completing wave ((3)) on August 23, 2024.
- Now, wave ((4)) is in progress, and the price is approaching a potential support area known as the Blue Box, which ranges from $125.11 to $97.78.
The Blue Box: A Key Area to Watch
The Blue Box represents a crucial zone where buyers could step in and start the next rally toward wave ((5)). Typically, corrections occur in 3, 7, or 11 swings, so traders should remain cautious and manage their risk.
Here’s What to Keep in Mind:
- Stay above the Invalidation Level: As long as the price holds above $97.78, the bullish outlook remains intact. A drop below this level would require a new analysis.
- Avoid Short Selling: The anticipated decline toward the Blue Box might tempt some to sell, but this carries risks. A truncation could occur, cutting the move short. Instead, watch for signs of a bounce in the Blue Box as a signal for the next rally.
Smart Risk Management
Because the correction could extend into 7 swings, consider taking partial profits on the first bounce. By doing this, you protect some gains and make your remaining position risk-free, setting yourself up for the potential wave ((5)) rally.
Why Elliott Wave Theory Points to a Rally
Elliott Wave Theory helps traders understand market trends and sentiment shifts. In this case, it suggests that once wave ((4)) finishes, TMDX could start a new upward leg, aiming for fresh highs with wave ((5)).
Conclusion
With TMDX nearing a crucial support zone in its Elliott Wave cycle, traders should stay alert for a potential rally. As long as the stock remains above the $97.78 level, the chances of a bullish move increase. Use this analysis to guide your trading strategy and anticipate what’s next.