close icon

Barry Callebaut Can Drop 25% as Fourth Wave Unfolds

Barry Callebaut AG is one of the largest cocoa processors and chocolate manufacturers in the world. Formed by the 1996 merger of Callebaut and Cacao Barry, the company produces over two million tonnes of cocoa and chocolate per year.

Barry Callebaut went public on the SIX Swiss Exchange in 1998 and has been quite rewarding to investors ever since. Over the 18 years since October 2002, the stock is up nearly twenty-fold, climbing from a low of CHF 108 to CHF 2022 as of this writing.

Earlier this year, the COVID-19 market crash caused a sharp plunge that erased over 27% of the company’s market value. Fortunately for the bulls, most of it has now been recovered as the stock currently trades above the CHF 2000 mark. Now let’s take a look at Barry Callebaut from an Elliott Wave perspective.

Barry Callebaut weekly chart Elliott Wave analysis

The weekly chart above reveals the stock’s entire progress since its IPO. The price’s path reminds us of an incomplete five-wave impulse. Wave (1) ended at CHF 1078 in 2007. It was followed by a large decline in wave (2) down to the 61.8% Fibonacci level. Wave (3) then traveled from CHF 410 in 2008 to the all-time high of CHF 2240 in 2020. The five sub-waves of wave (3) can also be labeled 1-2-3-4-5.

Barry Callebaut to Lose A Quarter of its Value Over the Next Few Months

This means the initial COVID-19 drop must be part of wave (4). Once it is over, the bulls should return and lift the stock to a new record in wave (5). The problem is that wave (4) is too small compared to wave (2). Furthermore, its wave ‘c’ appears to be missing.

If this count is correct, we can expect another selloff in Barry Callebaut to drag the stock to roughly CHF 1500. In that area, the bears would likely have to give up. They will be facing a support cluster, formed by the lower line of the trend channel, the 38.2% Fibonacci level and the support of wave 4 of (3).

The fact that the stock currently trades at a forward P/E of 35 further reinforces the short-term negative outlook. Barry Callebaut investors can brace for a 25% drop from current levels before the bulls return.

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:

GameStop Stock Can Lose 40% Short-Term

GameStop Corp., once the larger video game retailer, has been losing ground in recent years. The switch to e-commerce and direct-to-consumer trends led to a steady decline in GameStop’s sales. The intruduction of cloud-gaming is only adding to the company’s problems. On that backdrop, it is not surprising that the stock has been in a…

Read More »

Tesla: Elliott Wave Aside, This is Totally Irrational

Tesla is up over 13% in pre-market trading today after news of its scheduled inclusion in the S&P 500 index on December 21st. The stock’s phenomenal rise since the COVID-19 crash led the company to a market cap of over $400 billion. This makes it much bigger than established rivals such as Volkswagen, Toyota and…

Read More »

Biogen, Elliott Wave and the Quest for Alzheimer Cure

Biogen is one of the top-notch firms in the biotech space. With sales of over $12.7B in 2019, the stock has been very generous to investors in the past. In fact, it is one of only five companies mentioned in Christopher W. Mayer’s book “100-Baggers” that have returned 100 to 1 in under six years.…

Read More »

Ryanair Stock, Unlike Its Planes, Can Fly Again Soon

Few industries have been hit harder by the COVID-19 pandemic restrictions than the airlines. Flight numbers and passenger traffic have been significantly reduced in Europe and the U.S. since March. Even low-cost carriers like Ryanair were not spared. Ryanair’s passenger traffic plunged by 99.5% in May and is still down 64% in September. Apparently nobody…

Read More »

General Mills Bearish Elliott Wave Cycle Spells Trouble

The last time we wrote about General Mills stock was over a year and a half ago. Following a bullish reversal Elliott Wave analysis helped us correctly predict in late-December 2018, the stock was trading above $51 a share in late-March 2019. It was a 33% recovery, whose structure, however, didn’t look quite as anticipated.…

Read More »

Fortinet Is Strong, but The Stock Can Slide 40% Anyway

Fortinet Inc. provides cybersecurity solutions to large and small businesses and enterprises. The company went public on the NASDAQ exchange in late-2009. Great timing, as it allowed it to enjoy the phenomenal post-crisis bull market. In fact, by July 2020, FTNT stock was up 794% since its IPO, easily beating the S&P 500’s return over…

Read More »

NIU Stock, Down 18% This Week, Can Fall Further

E-scooters have been all the rage in the past couple of years. Much friendlier to the environment and often more convenient as an urban transportation option than cars, electric scooters were quick to gain popularity. Niu Technologies, a Chinese manufacturer, has been bearing the fruits of this trend. The company’s ADS trade on the NASDAQ…

Read More »

More analyses