Where Is MetroPCS Trading? MetroPCS along with many other telecoms has made great moves the past two months. PCS in particular has been in a corrective wave as of late and it’s worth taking a look at to find out whats been going on.
PCS traded from 5.65 to 8.14, this completed a wave 1, and has since pulled back to 6.96. This was a little more than an expected 32% Fibonacci retracement. The chart below shows daily price bars and the move off the bottom. The final wave of a correction contains five waves and in turn divergence in the MACD between wave 3 and wave 5 has occurred with a lower low in price, signaling a turning point. The wave 1 that followed is the wave that is being corrected right now.
The next chart shows an established A wave which is the trading between the high of 8.14 and the low of 6.96. Because PCS traded below it 32% Fibonacci retracement level during the A wave correction, it is likely that the B wave will form a triangle correction, in which the B wave will consist of 5 waves forming the shape of a triangle. The last wave will trade to the expected 32% Fibonacci retracement before beginning the C wave to a .618 retracement. The projected 62% retracement price level would be 6.57.
It is often helpful to create a quick sketch of the possible trading action. Doing so can expose problems in accuracy or interpretation of your wave count, as well as confirm your confidence in the trade to be made. Below is the calculated projected price points within the B wave to monitor the price action as PCS settles it’s corrective wave 2.
If the wave count analysis above is correct and MetroPCS follows through with this correction as expected, the next wave higher should be a powerful one. There is no way to determine the exact time frame of the move, but a projected wave 3 price high could reach 11.22.