“Long positions pay-off well, if they are opened near the 61.8% Fibonacci level. The invalidation level is 87.80, while the minimum target should be above the top of 101.00.” This is an excerpt from an article about the China ETF Index, which we published more than a month ago, on April 29th. The chart below will show you how the situation looked like back then.
The 5-3 Elliott Wave cycle was suggesting that we should prepare for another rise. That was all we needed to know. On the next chart you will find out what happened after this forecast.
As shown, prices went a little lower, only to touch the 61.8% Fibonacci level. The China ETF bottomed around 92, which was way above the point of invalidation of 87.80. So with a stop-loss at the right place everything was just fine. Soon after, prices started rising and reached the minimum target of 101.00 on April 30th. There is still some room left for the bulls, but if we consider this as an A-B-C zig-zag, the uptrend could be limited with waves 4 and 5 of “C” still to come.
