Targets and Stops – Previous fourth retracement

One of the most effective target calculation techniques is based on the previous fourth retracement. According to Elliott, prices move in a five wave structure and after completing such an impulse, prices tend to retrace at least till previous fourth levels. This is why after a peak or bottom, the respective levels become an important target to watch. We illustrated here an anticipated and happened case related to the previous fourth retracement on the Indian market.