We first wrote about Alteryx in the fall of 2020. The stock was surging after a better-than-expected Q3 revenue guidance and was quickly approaching $150 a share. With a market cap of roughly $10 billion back then, apparently it didn’t matter that this data analytics software provider was barely profitable.
In the era of money printing and meme stocks, the market wasn’t too interested in the company’s fundamentals nor valuation. So we took the other route and examined the stock through the prism of the Elliott Wave principle. Here is what we found on October 6th, 2020.
Eight months ago, the 4-hour chart of Alteryx revealed an almost complete 5-3 wave cycle. There was a very clear impulse pattern to the downside, labeled 1-2-3-4-5 in wave A. It was followed by what we thought was a corrective recovery in wave B.
Ahead of the 50% Crash in Alteryx Stock
The corrective sequence was already close to the 61.8% Fibonacci resistance level. So, we thought “a bearish reversal … near $155 a share makes sense. Wave C could then drag Alteryx stock down to $100 or lower.” The updated chart below shows what happened next.
The best Alteryx bulls were able to achieve was $154.83 on October 12th, 2020. The following eight months have been a real nightmare for them. On May 19th, the stock fell as low as $73.32, down 51% from when we wrote about it and 60% from its record.
However, we think the stock is still not cheap. It trades at a forward price-to-sales of 9 and its price-to-earning ratio is in the stratosphere. With that in mind, it makes sense for Alteryx stock to keep sliding going forward. Wave 3 of C to the south seems to be currently unfolding. The bears remain in charge.
Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!