"NAB, ...there's a bear in there... "

As NAB begins to retrace from its earlier Wave 4 high of $25, it would seem that the potential Wave 5 target low might be between $22 to$23.

In addition when we use the Ellipse tool to pick up the most probable position for the downward trend to continue, it has been incredibly accurate over the past few weeks. Refer to the price chart below as an example.

his is a price cart for NAB dated 24th June 2010, and as can be seen the ellipse tool has accurately picked :.

1. the false bottom to the projected Wave 5 and relabelled it as B in an ABC correction. 
2. The peak of the ABC correction as the Wave 4 high.
3. The end point of the first gap down which coincided with the Australian "Coup' where Prime Minister Rudd was deposed in favour of Julia Gillard as the new Prime Minister of Australia.
4. The last estimated ellipse point shows that NAB is at a significant support area

The plan, come Monday, is that if NAB breaks below the ellipse point of $23.83 and goes lower, then the hedge will be left in place. Otherwise the existing hedge will be closed and the profit taken to account and a new series of Puts will be put in place to hedge the stock position. If the existing hedge is closed out, the new hedge may be based on August Puts rather than July contracts as we are getting into the final 30 days and Theta decay and Gamma will escalate at a non linear rate to our detriment.

Cheers