Leap Wireless was a good trade coming out of last fall and was outlined on many occasions for its performance and underperformance during the trend from 9.51 to 14.50.
A meta tag search pulls up all prior analysis.
The current chart below shows the Elliott Wave formation that was used to pinpoint the price motion of LEAP, as well as the possible triangle formation in a wave 4 developing.
Use this Elliott Wave pattern to create price targets and strengthen your own scenario for the anticipated price motion in LEAP.
LEAP at this point has completed a parent wave 3. These parent waves are shown in white type.
The parent wave 3 is calculated using the price zero low of 9.51 and the wave 1 high of 11.77. Calculating a wave 3 with this wave 1 magnitude returns a price target of 14.56.
A scenario for a wave 4 triangle correction was expected to correct to 11.45. LEAP has corrected to a price of 11.48 so far, and with support here could form the triangle expected prior to wave 5.
The 11.48 low at this point is referenced as the A wave of the triangle. The B wave is projected to reach 13.39 and should result in the highest price prior to the resolution of the triangle at an E wave target of 12.62.
The triangle formation is shown in yellow and does not represent accurate price motion relative to time, only projected price.
The B wave of the triangle is the most tradable short term leg of this formation.
Look for a pullback between 11.80 – 11.70 to enter a trade to 13.39. A break below the 11.48 low means the A wave correction is not over yet, or not relative to the price motion of LEAP at this time frame and should be used as a sell stop.
Wave 4 is normally the longest wave to develop which is why sometimes it is preferable to exit at a triangle wave B. If the triangle formation then plays out the triangles price motion should break out higher above this price target at a later time.
A wave 5 price target based off wave 1 is 17.68.
If the momentum of LEAP is not able to sustain the wave 2 lows near 10.00 then the wave 3 formation is likely to have been a wave 4 correction higher and new lows may form beyond the price zero point.
