Dividend Growth Investing Using Elliott Waves: The Practical Approach to Better Yields by Ramakrishnan Ramki N

Author:Ramakrishnan, Ramki N. [Ramakrishnan, Ramki N.]
Language: eng
Format: epub
Published: 2015-03-28T16:00:00+00:00

Fig 9d – The sub waves within the major third wave are shown here

The challenge we all face is to decide whether or not to be patient for a 50% correction in the second wave position before buying. If we buy too soon, then our yield on cost will be less attractive. If we wait for too long and miss the boat, well that is a much larger cost! You see, the marvelous advantage we have over the trading community is we don’t care if the price goes lower. We don’t have a stop loss! (Of course, we will always be alert to any fundamental changes to the company’s prospects, but we have no time for the daily noise that the traders seem to love.)

So our decision to buy some at the 38.2% retracement level in the wave (ii) position will be dictated by two considerations. First, we will see how much upside is likely in the third wave and secondly, we will look at a three-wave move, (abc), to complete the second wave. If wave ‘a’ was brief, it is likely that wave ‘c’ will be long. We should always be on the lookout for alternation. Just as wave 2 and wave 4 alternate in complexity, distance traveled and duration taken to complete, so also will wave ‘a’ and wave ‘c’ alternate, You will learn more of these small details as you gain experience and study the personality of waves and all the examples in this book. Now let us turn to see what happened to GPC as it moved up from the bottom of the major wave 2 at $24.93 in March 2009.

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