Carrefour SA started rising on the 10th of July 2012 and have been in an uptrend ever since. This rally began at 13 euro per share and peaked on December 2nd 2013 at 29.14. After adding over a 100 percent, it looks like it could go a little higher and the 30 euro mark could be reached. From an Elliott Wave perspective hitting 30 is highly probable, because impulses have five waves and Carrefour SA’s fifth wave does not seem to be finished yet.
And while some may perceive 30 as a buying entry point, we think that the better decision is to get rid of those shares or go short on them. Our opinion is based on the repetitive nature of Elliott Wave Patterns on the markets. In this case, a five-wave rise should be followed by a three-wave decline back to the 22 area. So, instead of being more bullish about Carrefour SA, we are preparing for a 30% drop. Once the 22 euro level is touched, prices should take-off again. And while traders are able to play from the short side, our advice to investors is to wait. Patience is a virtue and it pays off more often than not.
