SUMMARY
Service Now (NOW) has been going near vertical for nearly two years, during which an impulse sequence of 1,2,3 and 4 waves were completed. Wave 5 has a bit higher to go (red circle). At such topping processes, it's important to maintain the bigger picture perspective. Many EW newbies would consider this to be THE TOP where price just comes crashing down. However, the bigger picture disagrees with that kind of assessment.
The MACD is also looking toppy and like will rise but to a lower high while price rises to a higher high. This kind of bearish divergence is a frequent attribute of a topping process. Note also how there are two cycles of impulse: blue and white. How would these waves fit into as subwaves? The resulting ABC correction is also shown to decline approximately 38%. But why?
The higher degree of trend count shows that purple waves 1 and 2 are complete and 3 is still in progress. Since the upcoming correction is purple 4; it can't overlap with the peak of 1; hence the usual 38% decline rather than 0.618. The ABC correction will probably take the downward wedge pattern; setting up a bullish scenario for purple 5.
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