FB 6/26/2013 – Has Its Elliott Wave 3 Started?


One of my Elliott wave observations for recent IPO’s is that a recent IPO stock can basically start anywhere in it’s Elliott wave structure (meaning anywhere from wave 1 to wave c).  The starting location seems to be dependent upon the issuance price and then the supply & demand surrounding the set issuance price.

 

Facebook (FB) is a recent IPO, in case you don’t remember.  It started high and went low.  That indicates to me that FB started at the top of their Wave 5 and then proceeded to form corrective Waves A-C, with Wave C potentially ending at $17.55 as seen below.

 

Facebook’s (FB) potential Elliott Wave Breakdown

 

The blue lines represent the largest scale Elliott Wave structure for FB while the red lines represent the potential sub-divisions of the blue structure.  The grey shaded box represent a current corrective pattern that is still forming, possibly a triangle to some degree.

 

The blue Wave 2 above is sub-divided into the corrective red Waves labeled a-c.  Wave A subdivides into a 5 wave impulse wave; Wave B properly sub-divides into a zig-zag; Wave C sub-divides into a 5 wave impulse wave.  Refer to the next chart for these breakdowns.  The Wave labeling for each of the different sub-divisions of waves are color coded to the trend lines.  The largest scale Elliott wave on this chart is the blue wave, next are the red waves and then the black waves.

 

Facebook (FB) and a Potential Breakdown of an Elliot Wave 2

 

While all the requirements have been met for the largest scale Wave 2 to be completed, remember that Elliott waves are dynamic and as with any Elliott wave pattern, the pattern can quickly change into another pattern.  Refer to my prior FB update as well that also lists some key items to watch in determining if the blue wave 2 is completed or is still in progress.

One important note – Elliott said the waves should have the right look and feel – the one item that does not have the right look and feel to me is the breakdown of red Wave a.  The black impulse waves 1-5 do not seem very symmetrical when breaking down wave a.  I am still analyzing and working on other possible subdivisions of red Wave a.

 

We will check back soon on this stock.

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