Biosensors International Technical Analysis from an Elliott Wave Perspective – 18 April 2012

Biosensors has a classic Elliott Wave formation in place. Biosensors reached a peak of 1.7 on 6 Feb 2012 and came down heavily in what looks like a 5 impulsive waves to a low of 1.38 on 12 Mar 2012. I am labelling this as Minor wave 1. Thereafter the stock recovered quickly in a five wave formation again. The first and the second leg had high volume (blue arrow) but the final wave (red arrow) did not have the same volume confirmation. This was an indication that the move is weak and a correction is due.

The correction did come in but, it was a very deep correction. This correction can be counted as another fractal of five waves. I believe that waves 1-2-3 are complete and wave 4 is in progress. Target for wave 4 is 1.47 or 1.50. Thereafter, wave 5 is expected to bring Biosensors to a low of 1.38.

This whole move since Feb 2012 might be a zig-zag or it could also be a reversal in the trend. We can only confirm this when the next wave up comes in. If that recovery is capped at 1.53 or below, it would confirm the reversal. If on the other hand, the stock moves beyond 1.53 and breaks 1.63, it would confirm that it was indeed a correction and further upside is likely.

The other point to note is that a long term trend line since 2009 is at the current levels. This is likely to provide some support. If this trend line breaks, it would also indicate further downside.