Update To Elliott Wave Count For GOL Analysis

It got sloppy on April 20th with the S&P outlook downgrade (link) but the chart has still performed to expectations initiated about a month ago (link).

The organized wave patterns projected were hard to follow.

But in retrospect the completed wave is not only confirmed by the appropriate parent wave 3 and 5 price and macd divergence, but the internal wave 3 and 5 of 5 price and macd divergence.

This is a good confirmation that the initial projections were valid opportunities to initiate a trade.

This chart has a lot of information in it. The purple markings represent the macd relationships. The yellow type represents the parent wave peaks of the projected trend to 14.29. The light blue represents the internal waves of wave 5 only.

Now that the 5 waves projected appear to be completed these 5 waves can be counted as a parent wave 1. This is represented by a white trend line and white type in the chart below.

If the count continues we want to look for a parent wave 2 correction now. The potential price projections are shown in the calculations chart below.

Wave 2 can correct up to 100%.

While selling the position Tuesday has so far looked smart, we are still bullish on the stock long term. After wave 2 is complete we expect the next wave higher in GOL to be volatile and strong as wave 3 is the strongest.

Currently GOL is resting at the 13.88 support level. This was the internal wave 3 of 5 from the prior projections. (chart)

I don’t believe that this support will hold and hope to reestablish a position lower.

I think that first support will occur at 13.67 and if volatility kicks up 13.23 level could be reached as well.

These are roughly the .382 and .618 fibonacci retracement levels shown in calculations.

I think that todays support is misleading from a wave count stand point because visually it appears as if GOL topped out at 13.88, has already completed a healthy correction due to the length of wave 4 internal of 5, and has since broken prior resistance hitting the recent 14.33 high.

According to the wave count based off the 12.56 low, parent wave 2 is just beginning.

All previous analysis on GOL can be found here.