In this technical blog, we will look at the past performance of 4 hour Elliott Wave Charts of XLK. In which, the rally from 23 March 2020 low unfolded as an impulse and showed a higher high sequence. Therefore, we knew that the structure in XLK is incomplete to the upside & should see more upside. So, we advised members not to sell the ETF & buy the dips in 3, 7, or 11 swings at the blue box areas. We will explain the structure & forecast below:
XLK 4 Hour Elliott Wave Chart
Here’s 4hr Elliott wave Chart from the 1/23/2022 Weekend update. In which, the rally to $177.68 high ended the cycle from 23 March 2020 low in cycle degree wave III & made a pullback in wave IV. The internals of that pullback unfolded as Elliott wave zigzag structure where wave ((A)) ended in 5 swings at $161.29 low. Then a bounce to $170.36 high ended wave ((B)) & started the next leg lower in wave ((C)) towards $153.84- $143.59 blue box area. From there, buyers were expected to appear looking for new highs ideally or for a 3 wave bounce minimum.
XLK Latest 4 Hour Elliott Wave Chart
Above is the latest 4hr Elliott wave Chart from the 2/08/2022 update. In which the ETF is showing a reaction higher taking place from the blue box area at $153.84- $143.59. Right after ending the zigzag correction within the blue box area. Allowed members to create a risk-free position with the minimum reaction higher towards 50%- 61.8% Fibonacci retracement from the peak at $161.98- $165.69 area. However, a break above $177.68 high is still needed to confirm the next extension higher & avoid double correction lower.
Source: https://elliottwave-forecast.com/stock-market/xlk-provided-buying-opportunity-blue-box/