LEH - Bullish Wolfe Wave

(Click On Charts To Enlarge)

We looked at Chart #1 back on July 14. In Chart #2, we can see that the low came in the following day, at 12.02, on a Bullish Doji Star Hammer. Those are only bullish if the high of that candle, 14.58, gets taken out to the upside and we also want to see it taken out on a closing basis. There still is no guarantee that a significant low is in. If it isn't in, stop it out below the 12.02 low.

In this case though, LEH put in a very strong candle on July 16, taking out the 14.58 high of the Bullish Doji Star Hammer, and closing at 16.65. From there, it regained the Wolfe Wave, failed the first attempt to break out above the Wolfe Wave, found support at the bottom of the Wolfe Wave, then broke out of it on a closing basis in yesterday's trading.

So far, so good. If LEH doesn't get to the target line (#6), this still is one heck of a nice rally, consistent with Wolfe Waves. At yesterday's high, LEH was up 83% in only seven sessions, gaining almost as much as it lost in one and a half years!