"NAB, wave 4 - let's take the scenic route ..."

Back on our last NAB post for Friday June 25th, it looked as if we had some excellent confirming signals that NAB had peaked and was ready to retrace into a Wave 4 downward.

"... Not a failed Wave 5 but an extended Wave 4 ..."

Comparing the chart on the left to the earlier chart we can see that NAB hit the ellipse target on the 22nd of July and began to retrace back up.

By shifting from the normal Elliott 5,35 oscillator to a 5,17 we can see the inner wave structure and although the 5,35 oscillator did not exceed 90%-140%, the retracement of the intermediate wave 4 count did not pull back to less than 90% and as such was an early warning that the downward trend was most likely not going to continue.

In fact NAB did retrace back up into the $25.50 region and because this was a new high the Elliott Wave 4 recounted and shifted from the previous high in the 24th June to the new Wave 4 high on the 3rd August.
At this point we waited for the new Wave 4 to break out of the regression channel and cross the 6,4 displaced moving average to give us the signal to enter the short protective puts for the Collar position. Note also that the 5,17 Oscillator has pulled back to the zero line and is trending in the right direction.

As of close on Friday 13th August, we had Nab trending sideways for the day as it hit a support line at $23.41. However our downside inotial target projection is at $23.26 where we will tih=ghten our stops and wait to see if this support level is broken. If this is the case I would expect Nab to trend lower to around $22.50 in order to reach a low below the previous wave 3 and in doing so, finally manage to get the bearish Wave 5 completed.

"trading a failed wave 5 is a snap"

Cheers