Here is another example of an expanding diagonal. This is probable wave 1 of C, so there is a lot more to go (however, it could be just a first a-b-c shown in red). Before anything else the stock should find its way back up to about $45 , usually in rather violent bursts. These patterns occur when the market takes the stock too far, too fast. The market action can best be compared to a busload of elderly tourists visiting the Grand Canyon. Curiosity will keep them tiptoeing ever closer to the edge un till one falls over the side causing a frantic retracement. These patterns are highly accurate in terms of their predictive value!
Loews Corp. has been trading around $37 now for about 3 months, or , if you take a broader view, 6 months. The action has the look of a triangle, perhaps not a perfect one but a triangle nevertheless. It is entirely possible that we are presently still in wave c and not in e as shown in the chart, but that does not rhyme well with many other triangles that can be observed. So, assuming this is correct, we should be going down soon. A break of $36.5 will be needed to add confidence to this outlook.
This is a grocery store stock that got killed a few years ago. It lost 2/3 of its value and dropped into the level of the 4th wave of 3 and then some. The drop is a perfectly symmetric zig-zag, 5-3-5 structure . By all standards this very likely means that the entire “correction” is complete. Even if it is not , one would expect an initial rebound back to the wave b level of the correction at about $55, and possible much higher thereafter. From the present $39 that is a gain of about 40%. In this scenario the stock should not trade below about $37 as this would cause overlap, so $2 risked to get $16, an acceptable risk/reward ratio.