Technical analysis
Impulse wave
Definition
A five-wave move in the direction of the larger trend, labeled 1-2-3-4-5. Waves 1, 3 and 5 push with the trend; waves 2 and 4 pull back.
Example
Suppose a stock rises from $20 to $25 (wave 1), dips to $22 (wave 2), climbs to $32 (wave 3), pulls back to $28 (wave 4) and pushes to $33 (wave 5). The count respects the usual rules: wave 2 holds above $20, wave 3, at $10 long, is not the shortest push, and wave 4 stays above the $25 top of wave 1.
Hypothetical numbers, for illustration only.
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