Credit Agricole stock has been in a strong downtrend for almost six years, starting from October 2006 until June 2012. During that period prices fell by 33 figures from 36 to 3 euro per share. Currently at 10.80, people may start thinking that Credit Agricole is finally recovering. But rising prices alone have no forecasting value and do not mean anything. Let’s see if the rally of the last two years can pass the test of Elliott Wave analysis.
The weekly chart shows that the price action since October 2006 looks like a 5-3 Elliott Wave cycle. The decline all the way down to 5.92 in March 2009 has a very clear five-wave impulsive structure, which means that the rest of the chart represents the corresponding three-wave correction, labeled (B). Since the retracement includes a new bottom below the end of wave (A), there are two possible types of corrections, which may develop. The first one is shown on the chart above. It is a running flat correction. The next chart will show you the triangle scenario.
If the Market decides to choose this count, Credit Agricole stock prices may remain in the range between 14 and 3, before eventually breaking it to the downside. In conclusion, we have two counts – both bearish. The only difference is in the shape of wave (B).
