close icon

CVR Energy Remains a Solid Long-Term Oil Play

Almost two years ago, on September 12th 2016, we published an article about a little known oil refiner, whose stock price had plummeted by over 82% in just over three years. The company’s name was CVR Energy Inc. and its crash of course coincided with the great selloff in crude oil prices. And while others were running as far away as possible from everything oil-related, we decided to take a look at CVR Energy’s stock chart and see what that plunge meant in the context of the Elliott Wave Principle. Here is what we found.
cvr energy stock elliott wave analysis
CVI‘s decline from $72.32 in May 2013 actually preceded an even bigger five-wave impulse to the upside from as low as $2.15 in October 2008. According to the theory, every impulse is followed by a three-wave correction in the opposite direction and that is exactly what the post-2013 selloff was. It looked like a simple (a)-(b)-(c) zigzag correction with a running flat in the position of wave (b). Once a correction is over, the larger trend resumes in the direction of the impulsive sequence. Hence, we thought that instead of joining the bears, it was time to be contrarian. The updated chart below shows what has been going on since September 2016.
cvr energy elliott wave update
By mid-May 2018, CVR Energy stock was trading in the vicinity of $48 a share, up 296% from the low at $12.03 on November 3rd, 2016. Sometimes patience and discipline is all you need to multiply your money four. Nevertheless, the bulls could not maintain the positive momentum. As a result, the stock is currently hovering around $37.50 a share. The good news is this decline seems to be just another pullback, since the recovery from $12.03 to $47.67 has a five-wave structure, as well.

If this count is correct, wave (2) should drag the price down to the support area of wave 4 of (1) near $28 per share before the uptrend resumes. The global oil glut is now resolved and OPEC, Russia and the United States are already struggling to prevent a deficit. CVR Energy is well positioned to benefit in this “back-to-normal” environment in the long term.

Did you like this analysis? Learn to do it yourself with our eBook Elliott Wave guide!



Stay informed with our newsletter

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

Privacy policy
You may also like:

Visa ‘s Diagonal Pattern Can Mean a Top is Forming

Visa has been a wonder to behold almost since it went public at $17.25 in March 2008. True, the following twelve months surely must have scared many shareholders, but the ones who stayed have been generously rewarded. Since the bottom in 2009, Visa stock is up over 2000% and that is without counting the dividends.…

Read More »

NYSE Operator Can Fall 50% as Correction Begins

Exchanges don’t exist in a vacuum. There are companies whose entire operation is dedicated to running them. We recently wrote about CBOE Global Markets – the company operating, among others, the Chicago options exchange. Today, we would like to examine another major company in the field – Intercontinental Exchange Inc. – the company owning the…

Read More »

Lululemon Stock Can Add ~30%. Then It Can Halve

Lululemon has gone a long way since its July 2007 IPO. Investors brave or lucky enough to have bought after its 93% collapse during the 2008-2009 Financial crisis and stayed the course have made a real fortune. in September 2020, LULU stock was just pennies away from the $400 mark. Although it dropped by a…

Read More »

Disney Stock Bulls Play With Fire Above $200 a Share

2020 was shaping up to be a disaster for Disney shareholders. Not only did the COVID-19 selloff cause a 48% plunge in the stock price, but the indefinite closing of cinemas worldwide crippled Mickey Mouse’s business operations. The company’s Disney+ streaming offering came to the rescue, but still could not prevent the company from posting…

Read More »

Snap Stock Bouncing Off Fibonacci Support

It took over three years for Snap Inc., the company behind the popular app Snapchat, to reach its IPO valuation. After reaching almost $29.44 on its second day of trading in March, 2017, SNAP stock fell as low as $4.82 in December 2018. On the other hand, investors bold enough to buy near those lows…

Read More »

Rapid7 Doubles As Elliott Wave Setup Bears Fruit

We first wrote about Rapid7 in late-August 2019. The stock was hovering above $55.50, but the structure of the post-2016 uptrend suggested a notable decline was in progress. In March 2020, it fell to $31.34, down 52.5% from its all-time high. A month later, with RPD still below $47, we shared our bullish stance on…

Read More »

PNC Financial – Elliott Wave Analysis Works Yet Again

Earnings at PNC Financial suffered last year along with the entire financial sector. Net income before extraordinary items came in at $2.95B in 2020, down from $5.35 in 2019 for a 45% reduction. In our opinion, amid the biggest crisis since the Great Depression, the fact that PNC and its peers even managed to stay…

Read More »

More analyses