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IBEX: Follow Up of the Long Term EWP
I maintain the big picture, which I posted on June 28:
"The cardinal idea is that price is unfolding a Double Zig Zag = (ABC=W; X; ABC=Y)
From the 2007 top we can segregate the pattern into 3 sequences:
- The first Zig Zag was completed on March 2009 (ABC = W).
- The wave (X) was established at the January 2010 top.
- From the January top price is unfolding the wave (A) of the second Zig Zag with a complex Triple Zig Zag. If this scenario plays out then price has established the wave (a) of the third Zig Zag.
The projected equality extension target for the wave (Y) is at a "bloodcurdling" 2902.
Below is the monthly chart I posted:
The Triple Zig Zag wave (A) was established at the July lows, therefore if the overall count is correct price has embarked in a countertrend wave (B) that eventually will be badly sold. Once the wave (B) is in place the long term down trend will resume with a wave (C) down that could match the length of the previous wave (A) = - 6335 points.
Usually a wave (B) tops in the Fibonacci retracement range between the 0.5 & 0.618.
We can see that price has reached the previous wave (X) which was established with a Triangle and a speculative upper trend line of the channel within which price has unfolded the Triple Zig Zag hence given the extended move in this area I expect a short term pause.
In the overdue pullback I don't expect price to breach the 20 wma = 7943, while the potential final target as mentioned above could be located in the range 9070 - 9818
Weekly RSI does not show a negative divergence hence this up leg is not the last one within the assumed wave (B). It remains to be seen if in the expected following pullback the RSI will not breach the rising trend line in force since the June 2012 low.
In the next weekly chart I show my preferred count for the up leg from the July low, which is a Double Zig Zag
If this count is correct price is unfolding the wave (A) of the second Zig Zag
The equality extension target for the wave (Y) is at 9816, which coincides +/- with the 0.618 retracement of the wave (A) Triple Zig Zag down leg off the January 2010 top.