The big change between April 30th and now, is that we had a number of significant market announcements that impacted financial institutions. There was the sovereign debt crisis of Greece, Spain and Hungary, leading to the "Flash Crash". Then, the was the BP oil spill, the elections in Germany, and the UK. There was the threatened demise of the Euro, and finally for NAB, there was the rejection of the AXA deal by the ACCC, and then NAB pulling out of the Royal Bank of Scotland retail branch M&A deal in the UK, which drew NAB's UK operations into question. The impacts of these market announcements is highlighted in yellow.
Chart 1.
As we can see from the the price chart above, the potential for a Wave 4 low was lost when the various falls in NAB's price were so material that we got an Elliott recount and a new Wave 3 low down to $22.25.
So, what can we expect over the next week for NAB's price? The price chart #2 below is for June 22nd and shows that NAB exceeded the traditional 38% target of $24.64 and has headed up to the next Fibonacci level for the 50% retracement level of $25.38. Interestingly, as of today the price is beginning to weaken and may reflect the beginning of the new Wave 5 down. However if we look at the recent high, the price stopped right on the 50% Fibonacci level of $25.38.
Chart2.
Elliott theory suggests that if Wave two is a simple structure, then we should expect Wave 4 to be a complex structure.This is called the "Rule of Alternation".
So how has NAB gone since April 30th ? We can see from the price chart #2 above, that the Wave 4 has in deed had a few false starts at attempting to reach our potential target of around $25 which is consistent with the "Rule of Alternation".
It would seem that at this stage there is an early indication that Wave 4 has now completed at the 50% Fibonacci level of $25.30 and will now head back down to a Wave 5 low target of around $22.25.
Cheers
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