Cholafin The major correction

7 May 2022

Now we are in the corrective phase and currently in Wave C which is a 5 wave impulse lower. We are currently in the 3rd subwave and expecting a brief retracement for subwave 4 and then another move lower for subwave 5.
We have the fibonacci extensions in place for possible reversal zones which we can look at for a bounce. We also have a descending trendline in place to actively monitor any sort of breakout. Bare in mind that a breakout may be a complex correction as opposed to an actual break. We just need to see how price action plays out and then go from there.
rsi negative divergence
macd rsi divergence

Right now there isn't any trade setup as we're in the middle of the move. Once we see any sort of corrections, we can prepare ourselves for a trade.

Hope this post helps you understand the current market structure.

Goodluck and as always, trade safe!