A year and a half ago, in late-April, 2025, we thought that the stock of Core & Main, a leading water infrastructure manufacturer, was on its way to a new all-time high. Our analysis was far from bullish, however, because of the company’s high valuation amid sluggish revenue growth. But it was the Elliott Wave chart below that convinced us that the “bears may still be hiding in the pipes.”
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It revealed that the sharp surge from under $19 to over $60 per share took the shape of a five-wave impulse, marked (1)-(2)-(3)-(4)-(5). The pattern was, of course, followed by a three-wave correction down to $37, when the bulls decided to take the wheel again.
The complete 5-3 wave cycle from that low in 2024 strongly suggested that a new record high was likely to occur. Unfortunately for breakout traders, it was most likely to mark the end of wave (b) of an (a)-(b)-(c) expanding flat correction, rather than the start of a new uptrend.
Once wave (b) was over, another notable decline in wave (c) could be expected to drag Core & Main stock below $40 again. Eighteen months later now, the updated chart below shows how the situation unfolded.
The bulls made it to $67.18 in September, 2025. Then the company caught them off guard by lowering its revenue guidance for the year. This led to a 25% drop in a single day, which triggered a decline investors are still suffering from today. Trading around $40 per share as of this writing, Core & Main is down 40% from its 2025 record.
While this is enough to declare this an accurate forecast, we cannot neglect the fact that wave (c) is not developing as a five-wave impulse. The only other option, if our expanding flat assumption is correct, is for wave (c) to form as an ending diagonal. The first three waves are already in place and the a-b-c structure of wave 1 and 3 is clearly visible.
This means that waves 4 up and 5 down are all that’s left of Core & Main’s bear market. There’s still room for the price to drop to the mid-$30s, but a bullish reversal would then make sense as the entire I-II cycle would be complete and the uptrend should resume in wave III.
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