Today we look at Facebook (FB) after reaching the blue box, and its potential to continue higher
Looking at the 1 hour chart from 4/14/2021 below, we see a five wave sequence up from the $277.10 levels. This move completed a cycle in red wave 3. Within the red wave 3 itself, we see a subdivision of the third wave into lower degree blue waves (i) to (v), which are also impulse waves. We also see an extension in blue wave (i) of ((iii)). In other words, impulse with extension in blue wave (i). We usually see extensions in third waves.
Down from the red wave 3 peak, we see a correction underway in red wave 4. The stock completed black wave ((w)) within the smaller blue box between $308.47 and $304.59. Up from there, the stock completed the 4th swing in black wave ((x)) at around $315. Thereafter, it turned lower in black ((y)), towards the $306.16 and $301.04 blue box area.
Elliott Wave 1 Hour Chart 4/14/2021
In line with our strategy, we entered long positions from the $308.47 and $304.59 blue box area. However, we see that the stock later went lower, below the 100% extension. We incurred no losses, as our clear strategy rules put stop below the 161.8% extension. We create risk free positions from entry when it reaches specific retracement levels.
In the 1 hour chart below from 4/16/2021, we had minor label adjustments, upgrading the degrees one level higher. After FB reached the blue box, it reacted higher. Black wave ((i)) is proposed completed at around the $310 area. We expected a pullback lower in black wave ((ii)) before we see upside continuation. As per Elliott Wave Rules, black wave ((ii)) should find support above the start of black wave ((i)). And subsequent waves ((iii)) to ((v)) of 1 shall be expected. We, however; need to see a break above blue wave ((3)) to confirm the next leg higher in blue wave ((5)). Lest, we see a double correction lower in (4) which we like to buy again in larger 7 swing if that happens.
Elliott Wave 1 Hour Chart 4/16/2021
Source: https://elliottwave-forecast.com/stock-market/facebook-fb-continue-rallying/