Elliott Wave Analysis of Midas (5EN – Singapore) – 24 April 2012
Midas has formed an impulsive upwards wave followed by a corrective wave. The upwards move is labelled as Minor wave 1 and the corrective wave is labelled as Minor wave 2. Wave 2 has retraced slight more than 61.8% of wave 1. The volume for wave 1 was rising with price thus confirming the impulsive move. The volume for wave 2 has been declining thus confirming a corrective or consolidation phase. Volume for wave 2 has now subsided considerably since early April and it now looks like accumulation is on going as the price is trapped in a tight range but with decent volume.
Wave 2 is a complex correction which is normally not the case for waves 2. Still, it does happen and in such cases, we can expect a simple wave 4 to come after wave 3.
The next move that is anticipated once the accumulation is over is wave 3 which should be a vigorous and powerful surge upwards. Based on Fibonacci extension of 1.62 of wave 1, the target for wave 3 is 0.56.
The MACD has flattened and is right below the zero line and has plenty of room to go before getting into overbought levels.
From a technical analysis perspective, chart does sport a rounded bottom or cup and handle formation. The volume follows the rounded bottom pattern which is normally the case. This pattern has formed over a three month period which is long enough to indicate the strength of the pattern.