How to Analyze Stock Trends with Elliott Wave: Step-by-Step Charting

[00:00:00]Hey, hello everyone. It's Chris again with Elliott Wave Cafe coming to you with um you know, another discussion here on Elliott and I I wanted to take a look today at Core Weave. It's definitely uh you know, a super interesting formation in here.

[00:00:14]There's a lot of lessons uh in this particular chart which is, you know, kind of crazy and sideways, but I don't know if you've attempted to count it or if you have the count for it. Um but you know, if if you don't, you know, maybe take a take a pause and try to see if you can come up with something uh on this thing. It's definitely um very interesting. It's It's It's one of my holdings. I do hold the stock in my in my own portfolio.

[00:00:39]Uh you know, and and uh I think it it looks interesting, you know, it definitely had a few false starts in here, but um again, it's in a position where I think um warrants a bit of attention. So, uh take a second and try to count it um and then I I will show you my counting here.

[00:01:00]All right. So, here it is. I'm going to go uh right here and uh I'm going to pull it up and then this way, you know, you can kind of compare it to what you have and and see if if it makes any sense, but um I want to take kind of each individual leg a little bit and then, you know, we'll talk about the final one.

[00:01:19]Um you know, so clearly, you know, from the IPO, we we we broke lower and then, you know, a long very strong impulse um in here where it went from, you know, 30 to I don't even know, maybe 170 bucks. Then, started to come down um in in in what it looks you know, at the time, might have looked like a different correction, uh especially because of this huge rally in here, but I think this could be made into a fourth wave. Um it's definitely tricky, this one. What I do like about this is is the the last portion of it, which is a which is a nice five-wave decline, which, you know, it tells me that that's likely was a C wave, uh which means that that this, you know, has to be a wave A.

[00:02:11]And then, look how nicely it pulled into the 61.8 um of this entire rally, right? So, you know, if if you've gotten long into these levels, um was definitely a nice place to do so.

[00:02:28]Um you know, a little bit of confirmation. I mean, you know, obviously on this first rally, you would have probably gotten stopped out if you had the stops just below this low. You know, if you cuz you you always want to wait a little bit to see, you know, how it reacts, obviously, um from those levels before you kind of start initiating positions, or you start very small.

[00:02:51]Um although in here, you know, you could have said, "Well, you know, it it's a wave four is here, and then you had a final five, and you're almost done."

[00:03:01]You know, but look, the market did the real fourth wave, and then it pushed lower in the final fifth, and then it's starting to kind of move higher.

[00:03:08]So, you know, it's tricky like that, right? Um but nonetheless, the the formation it's it's it's super interesting. Let's measure this wave C versus this wave A.

[00:03:18]And you will see um that we've gone basically just a touch more than 100% um you know, almost 114, uh but we were very, very close uh to that 100, which is one of the characteristics of a zigzag, right? You have that nice equality um in a beautiful zigzag between wave C and wave A.

[00:03:47]So, keep this in mind in here, and then, you know, we're going up in a nice little impulse 1 2 1 2 um 3 4 5 4 and 5. So, you have a wave one, I would say.

[00:04:03]Um you know, again, some of you might disagree, but that's okay, too.

[00:04:07]Um you know, you you could say, "Well, this is still maybe part of the whole corrective decline." And, you know, this is a wave ABC. So, this becomes a W.

[00:04:17]Uh this is a connector X. And then, somehow in here you have another wave Y.

[00:04:23]Um and and I'll run you through the scenario shortly, so you can kind of see what I mean. It's interesting, too. Um you know, I I I choose to go with this 1 2 1 2. You know, it seems a bit more appropriate just because if I move this wave to here, you know, it would be a very very long wave two.

[00:04:41]Not impossible, but, you know, I want to keep a bit of a proportion if I can.

[00:04:46]Um and then what's interesting in here in this correct this correction in here, it's pretty crazy because you know, you're you're looking and you say, "Well, it's a 1 2 3 4 5. It's a five-wave." Yet, you know, it looks like a corrective move because then you're moving higher in a in a what looks to be a nice impulse.

[00:05:04]So, how would you count this? Well, you know, you can't really count an ABC because you know, you you you don't have uh the C wave in here.

[00:05:15]But, what you can do, remember, we wave B's can also be I'm going to put this up up in and see if you if you know I can what I'm thinking about, right?

[00:05:29]Okay, so this can be a very simple wave A.

[00:05:34]Triangle B and down in C.

[00:05:37]A B C D and E for a B wave, even though the E wave might just briefly go above the D wave, which is fine if it's by very very short, and then it drops into a wave C.

[00:05:51]Um and this is how you can get a corrective pattern that looks like a five wave, but it's actually a three wave decline. Another way you can do this, it is by doing this this way, and I'm going to show you uh we're going to go to a combination, and you can go in a wave W X Y. This wave Y, it's an ABC on its own, and it goes A B C. It's a flat in a wave Y of the in a wave Y of this WXY. So, that's ABC, connector X, ABC. Um I kind of prefer the triangle a little bit better. Um it looks somewhat cleaner. So, I'm going to kind of, you know, stay with that. Let me go and see if I can um There you go. We'll we'll keep it like that. So, ABC. Now, the other one that I wanted to show you was was and I can go over this um with this wave two being here, it's again just a uh um a combination, but I wanted to go with the with the triple combination.

[00:07:13]Uh let me see. I'm just going to do it like this cuz it's uh probably easier.

[00:07:16]So, we're going to go um in here we're going to go W and then we'll go X.

[00:07:26]I think this is what I wanted to show.

[00:07:29]W X.

[00:07:31]This is just for exercises, so you can kind of see.

[00:07:35]Uh but since this is an impulse, it cannot be a wave Y. So, we'll We'll WXY.

[00:07:42]So, you can put wave Y here. You can put wave X here and wave W right there. So, now that's a combination um and again, you have wave W in an A B C for a W. So, that's the that's the zigzag that creates a wave W.

[00:08:05]Then you go up in a wave X in here and instead of an impulse in here, you go in an A B C. Remember, wave X's cannot be impulses. They have to be uh corrective moves. So, the way you do that is this is an X and it's it's becoming like an A B and then that's a five-wave move in in C and this creates wave X. So, this is wave W and now you have wave Y, which is again in three waves, A B C. And this way this wave two moves here.

[00:08:38]Um I hope this was kind of clear. I mean, I could have done a better job just kind of deleting everything and just going again, but um if you pause the video, you'll know what I mean. But this way you got to know, you know, kind of why the how the complex structures, um you know, they're structured.

[00:08:54]Um you know, and and to kind of know what goes inside a W X Y, X and um you know, another Z if you if you even go like multiple corrections.

[00:09:08]Um so, then this way this wave two will move here and then the count will start basically uh from Let me push this back. It will basically start from the slow, which which it starts anyway right at the moment. So, um this in here again, um you know, is it another X, right? So, is it is it W Let me go again.

[00:09:33]Uh W X Y X and we're about to do a wave Z and then we go or are we basically done which I want to I want to say we are but you know again I'm biased because I am long uh core wave but here is the thing if this is a nice impulse in here uh in a wave one and then this in here as an ABC correction exactly to the 61.8 and this is where things kind of become interesting because wave twos they love the 61.8 retracement not only that but I'm looking almost at the perfection of the zigzag because if I measure wave C with wave A here is what I'm getting.

[00:10:18]I'm getting you see that green C versus A zigzag that's exactly 100% which was hit today to the penny.

[00:10:27]Um definitely a super nice zone of confluence now this is the condition the market it's giving us uh the signal though it's not here just yet. We have a little bit of buying that came in today because the market rallied. Um you know nowhere near enough.

[00:10:48]Um you know you can see just a kind of close in the you know upper section of the candle you're still below the 200 day you're still below the 50 you're still below the 21.

[00:10:59]So it's a risky entry.

[00:11:02]However you know someone that that that likes risk a bit more you know cuz every you know every gimmie's got a gotcha right? Something like you know you there's no free lunch so if you're going to buy here it's riskier but you can get more for your buck in a way right? You can you can kind of get in towards the lows.

[00:11:28]Just know that there is There's not a lot of confirmation here so if the market turns, you know, I would definitely put a stop below today's low.

[00:11:36]And then if you that gets taken out, you know, that's you know, that's that's that and then you got to try it again at some other point in the future.

[00:11:44]Um you know, you can enter very small um in here, you know, let's say if you want to have a 100% position or um I'm just talking when I say 100% I'm just saying, you know, a block of of stock. Um I don't know, let's say I don't know, 100 shares. Let's just say like that, 100 shares, right? Then, you know, maybe you just buy 10 over here.

[00:12:07]You know, it's a very small risk. And you're only risking on 10 shares. Then as the market confirms as it's moving higher, then, you know, then you can keep adding. Now, you know, your average is going to be higher, but that's okay, you know, because again you're getting confirmation that the market moves into your direction. Well, the real signal uh that will come um based on this strategy um is the B wave, the 132.15.

[00:12:33]Um once you kind of get above that level, 132.15, uh you know, you are way above the moving averages now and the wind is at the back. Um and and even though it might pull back slightly by that time, you know, that's the signal that the market can give that it's kind of ready to go. Now, it doesn't have to, right?

[00:12:51]It could fail.

[00:12:53]Um and and that's fine, but you know, this is kind of one of the ways to to kind of go about this like even here, right? On the you know, above this B wave high was a nice entry.

[00:13:07]Um you know, I don't think there was anywhere else. We never really gotten above this big B wave in here above 153.

[00:13:14]This is another level that is uh definitely important and and what I would look to kind of add and increase positions if it gets back above that 153.

[00:13:25]So, you know, again, this is kind of the trigger of the confirmation that, you know, a a third wave is is likely to start.

[00:13:34]Um again, it doesn't have to happen, but that's the that's kind of the point. And now, you just got to look at how it moves from these lows, kind of moving higher.

[00:13:45]You know, if it starts to to make a nice impulse, something like this, and and you know, just kind of watching it every day and see kind of how it behaves, if it gets above the moving averages in here, especially above the 200, if there's volume coming in.

[00:13:58]So, there little bit really there's really no rush um you know, in here, but [clears throat] I just thought this is this is interesting, because this is what can happen, right? This wave two can get a bit bigger. And again, this can become, just like I've showed you at these levels, this can become ABC, a W, and then you get a next wave here, and then you get another ABC decline, and only then you go.

[00:14:23]Again, it would be too big of a wave two, but I've seen them happen, so I'm you know, I I I know I know the risks.

[00:14:32]Um you know, in the stocks, and and I know what to expect, so that's why whenever you're you're on a prior swing high, just like this one here, look what look what this reacted from. Reacted exactly exactly from this uh from this prior move, because, you know, back then, you might have thought, well, this is an ABC or a WXY, and then you you went above it, but it failed miserably, right? It wanted to go, but it failed, and it turned back.

[00:15:01]Uh it created a move, it pulled back into the 61.8, and it was all downhill from there. So, again, you don't want to be in the situations when when when when that happens, you want to get out of the way. Um so, just kind of watch it, but just kind of my my two cents on this um you know, where where we learn a little bit about, you know, impulses and corrections and multiple corrections.

[00:15:24]Let me know what you think if you you know, you count this differently or if you have any other ideas or stocks you want me to kind of look at, but you know, give me definitely something that has you know, at least a hundred million dollar in in in in dollar traded volume per day. You know, very liquid, something where Elliott Wave actually matters.

[00:15:46]And you know, stocks that are you know, above 20 bucks, maybe at least 5 billion market cap. So, just you know, stocks that that are out there and they're important. You know, I don't want to account a stock that's like two bucks. And you know, it's got a hundred thousand shares a day or something like that, you know, just it's really hard. Those can be easily manipulated and there's no real Elliott Wave value there.

[00:16:12]Anyhow, thanks for watching everybody. I will talk to you next time. Bye.