Back in July when BRK-B was trading around 171$ I wrote an article saying that the upside was not finished and that price should go towards the 184-199$zone to complete wave 5. Price has reached this area.
So far the form of the rise in BRK-B is almost identical to text-book formations….too good to be true? Well it is what it is, and in the first place we managed to identify the upside potential it had since July. So what now?
Even if we zoom in closer, the price formation of wave 5 seems also very close to completion if not already completed.
Wave 4 does not overlap with the high of wave 1. What will tell us that this trend is over? The first warning we got is from the RSI in the daily chart.
Important bearish divergence signs in the RSI and MACD. Another bearish sign will be given if price breaks below 185.97$ and an even stronger one will come if price breaks below 183.80$. In case price confirms our view and starts the bearish reversal, we should pay attention to the form of the decline…why? Because an impulsive decline will be a bearish sign, while a corrective form of a pull back, could imply that we are just seeing a correction and the up trend will resume.
It is very difficult to pick tops and reversal points. But Elliott waves is a tool that can help us identify possible reversal levels and when a certain trend might end. Thank you for taking the time to catch up on my thinking.
