close icon

A Bad Elliott Wave Omen for Accenture Investors

Accenture plc is the global leader in professional services. It partners with more than 3/4 of the companies in the Fortune 500 and serves 92 of the top 100. Through its five segments – Strategy, Consulting, Digital, Technology and Operations – Accenture covers the whole spectrum of business services expertise.

However, despite its leading position, Accenture is not immune to the whims of the business cycle. Businesses tend to cut their expenses in a recession, leading to lower revenues for companies like Accenture which rely on business spending.

With Accenture stock near all-time highs and a recession seemingly on the horizon, can ACN decline from here? If yes, by how much? Let’s apply the Elliott Wave principle to the chart below and see if it can help us answer there two important questions.

Accenture can lose 40% in Elliott Wave correction

The weekly chart of ACN shows the stock entire uptrend from $11.30 in October 2002. Seventeen years later, the price is hovering above $193 a share for a total gain of 1608%, not counting the dividends. While a good visualization of Accenture’s impressive performance for almost two decades, this charts reveals one more thing.

Accenture Stock Not as Strong as the Company

The rally from $11.30 to $202.80 so far looks like a textbook five-wave impulse pattern. It is labeled I-II-III-IV-V with an extended third wave, a flat correction in wave II and a sharp zig-zag in wave IV. Unfortunately for the bulls, the Elliott Wave theory states that a three-wave correction follows every impulse.

If this count is correct, Accenture can soon plunge into a correction. The bears can be expected to pierce the support area of wave IV. This implies a decline to roughly $120 a share before the bulls can return. The RSI indicator reinforces the negative outlook. It shows a strong bearish divergence between waves III and V.

Accenture is a great business and we doubt that the anticipated decline in the stock is going to change that. However, we think investors joining the bulls near $200 a share are putting 40% of their capital at an unnecessary risk.

Did you like this analysis? 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!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Bristol-Myers Stock Pattern Triggers a 37% Surge

Bristol-Myers Squibb and Celgene are expected to merge into a single company before the end of the year. The deal will create the fifth largest pharmaceutical company in the world with sales of approximately $42 billion in 2019. Bristol-Myers fell sharply after the deal was announced in early-January. In late-April, the stock was still in…

Read More »

Home Capital: Third Wave Lifts Stock 140% in 2019

Home Capital Group is up 17.4% in Toronto today following the company’s third quarter financial report. The mortgage lender beat analysts’ earnings expectations and delivered improvements in other areas, too. In total, HCG is up ~140% in 2019. But things didn’t look so rosy at the beginning of the year. The stock was hovering in…

Read More »

Walgreens: Did the Market Foresee that KKR Offer?

Anyone who’s been in Elliott Wave analysis long enough has noticed how often some external factor “makes the price move” in the direction the analysis had identified much earlier. We’ve seen it happening in crypto, we’ve seen in happening in stock indices. Now, it happened with Walgreens stock. Walgreens jumped on November 5th after CNBC…

Read More »

SERV Stock Gave a Warning Before Crashing 40%

The last three weeks have been tough on ServiceMaster shareholders. SERV stock was hovering around $56 a share as October went into its final third. But when the company announced its preliminary Q3 results on October 22nd, all hell broke loose. Apparently, Wall Street didn’t like what it saw, which resulted in a swift and…

Read More »

Expedia Disappointed. Elliott Wave Analysis Did Not

Expedia stock is down 25% today after the company’s Q3 results missed expectations. GAAP EPS fell 57 cents short of analysts’ estimates. The revenue figure was anticipated to be $10 million higher than reported, as well. On top of that, Expedia cut its full-year guidance which annoyed Wall Street even more. That is the official…

Read More »

SEIC Stock Can Lose Half its Value in a Recession

SEI Investments provides investment management, processing and platforms for private banks, institutional investors and investment advisors and managers. With a market cap of roughly $9.4 billion, the company is in the mid-cap category, which is generally thought to offer some of the best growth potential opportunities. But is SEIC stock a good choice around $62…

Read More »

DexCom ‘s Wall Street Darling Status is in Danger

In previous articles, we’ve discussed numerous stocks, which brought their investors great returns in the past decade. Today’s material will focus on one that beats them all. DexCom – a medical device company, headquartered in San Diego, California. In November 2008, during the throes of the Financial Crisis, DXCM stock plunged to as low as…

Read More »

More analyses