On Wednesday afternoon, during the Mentoring session, someone asked if (RIMM) was a good Counter Trending candidate. We took a look at (RIMM), and below, you will see what it looked like at the time.
You see that it had gone THROUGH the MOB, and that the Oscillator had grown larger during Wave 5 than it had during Wave 3. These are two signs that this market is still in a strong UP trend. Also, the fact that it had gone through the MOB was a good indication that this MOB was not offering us Resistance, but was now a key SUPPORT level! I cautioned that RIMM might pull back down and use the MOB as support, at which time a good Continuation trade might be in order. Below is (RIMM) today.
You see that it was not only a new Type One trade using Elliott, but was also a Stochastic Continuation trade. The trade had a little better than 2-to-1 Reward vs Risk, and that we have nearly reached half way to the MOB objective.
I point all this out to say that I see this type of thing a lot with the MOBs. If a MOB level is breached, do not discount that price level. It is still a significant level in price. It just may turn out to be support rather than resistance, or vice versa.
Be Prepared!
nate mccartney
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