National Australia Bank in decline?

Over the past few weeks NAB has been rising with the market in general but is it time to rest? Lets have a look to see if NAB is ready to retrace.

In the above daily chart of NAB we can see the following observations that might indicate that NAB is about to drop.

1. Current price has rolled over and gapped down to $28.89.
2. Price has moved outside the upward regression channel materially the wave 4 Elliott Wave statistical bands have been materially exceeded indicating that a new wave 5 low is a very low probability and that it is more likely that we will get a double bottom around the previous wave 3 low of  $27.85.
   
3. The proprietary Profit Taking Index, (PTI), from Advanced GET is at 23 and is materially below the minimum target of 35, indicating a potential failed wave 4, and
4. The weekly chart shows exactly the same wave count and is seen as a stronger indicator of the wave position than the daily count.

If we force a more aggressive wave count onto the weekly chart we get the following chart.

In this chart we see that the more aggressive count has changed the wave 4 count to a rising wave 3 and that the current retracement is a wave 4 which is well within the wave 4 statistical guidelines with a PTI at 67, it is materially greater than the minimum of 35.

With each of these points in mind, it would seem that the stronger weekly chart indicates that NAB is trending lower but only for the moment and that we should expect a near term low around $27.85 and then for the stock to resume it's upward trend early in the new year - possibly due to the added value drawn from the potential financial rewards of the retailers "Santa Claus rally" - if there is one this year.

Time will tell.

Cheers