Autodesk Inc. stock started its uptrend from 28.00 in August 2012 and is currently trading slightly above 57. Almost 30 figures of steady rise in under two years is more than enough to convince the majority of traders and investors, that this stock is a good choice to invest in. However, we have said it before and we are going to say it now once again: investing decisions should not be based only on rising prices. That is why we use The Elliott Wave Principle, because it can tell us not only what is the direction of the trend, but it can also warn us if the trend is in its final phase and a reversal is near. On the chart below you can see how this 30-figure rise looks like. Its wave structure is noteworthy.
So, it seems that we have a perfect five-wave rally. The sub-waves of (1), (3) and (5) are also visible. According to the Theory, after every impulse, a correction follows. That is the reason why we think Autodesk is approaching the end of this long journey to the north. There should be a little more power left, which could lead prices up to a new top in wave (5), unless a truncated fifth wave occurs. In conclusion, breakout traders could be very disappointed, if they go long, when Autodesk Inc. stock makes a new high, because a reversal to the downside would be very likely.
