Hello Traders! In today’s update, we’ll analyze the latest price action of Modine Manufacturing Co. ($MOD) using Elliott Wave Theory. The ongoing pullback has now taken out key RSI pivots, confirming that Wave III of the cycle has ended. Currently, the stock is correcting in a Zig-Zag (ABC) pattern, approaching a critical support zone where buyers have historically stepped in. Let’s break down the key developments.
5 Wave Impulse Structure + ABC correction
$MOD Weekly Elliott Wave View November 25th 2024:
$MOD Weekly Elliott Wave View February 18th 2024:
Wave III Complete – Zig-Zag Correction in Progress
Since our last update, $MOD has continued to decline, confirming that Wave III has ended, and the market is now unfolding a corrective Wave IV. This pullback follows a Zig-Zag (ABC) structure, a common Elliott Wave pattern seen in market corrections.
Here’s how the structure has developed so far:
- Wave (A) initiated the first leg lower, signaling the beginning of the correction.
- Wave (B) provided a temporary bounce before failing to sustain upside momentum.
- Wave (C) has now extended into extreme areas, aligning with previous support zones.
Key Support Levels – Buyers Looking to Step In
The current decline is retesting a crucial support line, where previous waves 4, (4), and ((4)) found buyers. This area has historically provided strong demand, making it a high-probability reversal zone.
- Retesting Previous Wave 4, (4), and ((4)) Support: This zone has proven to be a key buying region in past cycles.
- RSI Pivot Break: The recent breakdown in RSI confirms that Wave III has ended, increasing the likelihood that this is a corrective phase rather than a trend reversal.
- Seller Exhaustion Nearing: As price approaches extreme areas, sellers may begin to weaken, allowing buyers to step in and initiate a reversal.
What’s Next? A 3-Wave Bounce to Correct the Decline
As $MOD tests major support, we are entering a critical phase. Sellers are likely nearing exhaustion, while buyers will attempt to regain control.
- A 3-wave bounce is expected to correct the decline from the January 20 peak.
- If buyers step in at current levels, the next upside move could take the stock back to key resistance levels before the broader trend resumes.
Traders should watch for bullish reactions at support, as this could mark the beginning of the next significant move higher.
Key Takeaways for Traders
✅ Wave III is confirmed complete, and a corrective Zig-Zag (ABC) is in progress.
✅ The pullback has reached extreme areas, retesting major support zones.
✅ Sellers are losing momentum, and buyers are likely preparing to step in.
✅ A 3-wave bounce is expected, offering a potential recovery opportunity.
Conclusion
Modine Manufacturing Co. ($MOD) has entered a critical juncture as its Zig-Zag correction approaches key support. With RSI pivots taken out and sellers nearing exhaustion, traders should watch for buying activity in this area. A 3-wave bounce could be the next move, providing an opportunity for bullish traders to capitalize.
Stay tuned for further updates as we track this potential reversal. Happy trading!