$CCJ May Need to Correct Its Advance

After correctly calling for the pop on $CCJ on August 25th here, I would like to consider its next moves. We can see at a glance that it’s made a 5-wave advance. If that’s “wave one” of a new bullish cycle complete, then we would expect a 3-wave correction to the 50-61.8% retracement of the move from the March 2020 lows. That would get us to the orange box. However, it wouldn’t be a very vigorous retest of the giant wedge its just broken out (I will show you that in the second chart), so it’s also possible that it corrects the move all the way down to the 78.6% retracement, also common (but less common) for wave twos. I have noted that with the orange line, and it’s interaction with the wedge would take us out fairly far in time.

CCJ

The alternative interpretation is that this is a 1-2-1-2 pump, and we’re really going to move now (note the lack of bearish divergence on the RSI in the chart above). That is possible, but after moving up over 400% in a year and a half, I think the probabilities favor a long correction. It’s not a meme stock, and it’s done enough already, in my opinion. I also have the feeling that the investing and speculating public have become too much involved, and that’s never a great sign, often coinciding more with tops than it is with bottoms or middles.

CCJ

So my call here is for a long correction.


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