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More and more charts from utlities to services to technology are displaying bearish conditions. American Waterworks, Co. (AWK) is no exception given the red halo event that's ongoing. How can these stocks decline into a correction while the DOW and SPX rise? Actually, such is a significant bearish divergence. AWK has likely completed a full impulse fractal up and that means a requisite correction is probably next.
The decline of the blue abc will be the subwaves of the red A. Red B and C would then likely follow. The overall corrective sequence is likely to be a flat. However, the depth of retracement shouldn't be underestimated. The subwaves qualify the higher degree of trend labels.
There is a pattern that could emerge while the ABC sequence runs its course. Can you see the pattern? The H&S pattern is labeled with the LS, H and RS. IF this H&S pattern completes and confirms by volume and price; then the white vertical line represents the minimum price run down.
The MACD should rise a bit for the blue b wave bounce. However, many will likely be fooled into thinking that the correction is already over when rather; it's just begun.
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Elliott Wave Counting Tutorial #1
Elliott Wave Counting Tutorial #2
Elliott Wave Counting Tutorial #3
Laddering and Buy/Sell Setups.
Laddering Example with EOS
Tutorial on the use of Fibonacci & Elliott Waves
@haejin's Trading Nuggets
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