BYD Company Limited, based in Shenzhen, is a leading producer of plug-in electric vehicles, surpassing Tesla by 2022. In 2023, it sold over 3 million new energy vehicles, aided by popular models like the Dolphin. Recently, the stock hit a new all-time high, with indicators suggesting continued upward momentum.

The monthly Elliott Wave chart for BYD reveals a completed Wave (I)-(II) structure, signalling a breakout in Wave (III). The stock initially rallied to 333, pulled back to 161.70, then ascended with Wave I peaking at 426.60 and Wave II pulling back to 309.80, before reaching new highs above 161.70.

The daily Elliott Wave chart details the ongoing rally within Wave (III), marked by nested sub-waves. The stock advanced, with each pullback leading to further gains, culminating in a peak at 426.60 for Wave I of (III) and a pullback concluding at 309.80. The stock is expected to attract buyers if the price holds above 161.70, suggesting more upward movements.

It is important to note that trading in the Foreign Exchange market carries risk, and it is advised to consider one’s investment objectives and risk appetite carefully. Losses can occur, and BYD’s stock performance cannot be guaranteed.

What we’re seeing with BYD’s recent chart progression is a clear breakout pattern that adheres to common Elliott Wave expectations, especially the broader five-wave structure typically observed in strong bullish markets. The early wave structures concluded decisively, pointing to renewed buying interest as the current leg extends upward. Wave (III), once confirmed, tends to be more impulsive and elongated compared to prior phases, which is what appears to be happening now.

Delving into the daily chart, the nested structure within Wave (III) stands out. These are often signs of healthy bullish continuation: each smaller wave kickstarts anew after a consolidation, forming a stair-step ascent. The retracement to 309.80 was relatively shallow given the magnitude of the first advance to 426.60 — revealing that short-term selling pressure didn’t erode the underlying strength. As long as the structure remains intact and price holds above earlier pivotal levels, the probability of advancing into extended wave territory remains elevated.

From a positioning standpoint, those managing short-dated exposure would do well to scrutinise the pullbacks within these internal waves. Trade entries after consolidation phases — not during stretched rallies — tend to offer more favourable reward-risk setups. With the price comfortably over former support around 161.70, that level now becomes a secondary reference point rather than an active area of concern.

Li’s firm has fundamentally reinforced this technical outlook through consistent delivery volumes and brand traction, giving some grounding to the wave patterns forming on the chart. That doesn’t eliminate risk, of course. Volatility can still compress pricing temporarily, especially if broader market sentiment shifts.

Looking forward, a pragmatic approach involves trading smaller increments within the larger trend. The wave count provides a context — it acts like a map rather than a crystal ball. So long as momentum continues to form around higher low structures, interim corrections could be treated as tactical opportunities rather than signals to exit. Spread exposure sensibly and reassess position sizes if price activity begins clustering near previous support levels.

Given the repeated resilience of the uptrend and alignment between timeframe structures, directional trades biased toward the upside remain justifiable, particularly using option spreads or staggered entries. Movements back towards recent breakout areas — including the zone just above 309 — can function as temporary bases for accumulation or narrowing downside hedges.

We’re also aware that options implied volatility has not expanded dramatically despite the recent highs. That tells us that the market is not yet pricing in aggressive directional risk — either from a correction or from excess euphoria. This keeps theta decay relatively manageable for long positions held as part of trend-following strategies. Awareness of those dynamics will be useful as the structure unfolds further over the coming weeks.