EQT Corporation, found in 1925 and headquartered in Pittsburgh, Pennsylvania, operates as an integrated energy company in the United States. In 2014, the company’s stock price hit 111.47. Unfortunately, the slump in crude oil and natural gas prices damaged EQT’s profits, so it is not a surprise that the stock declined to 47.10 in December, 2015. But is there a recovery in sight and is this dip a good investment opportunity or quite the contrary – just a part of a larger sell-off? The Elliott Wave Principle, applied to the monthly log price chart of EQT Corporation’s stock will help us find the answers.
The above-shown chart makes the entire uptrend since 1975 visible. Prices have been travelling to the north in the form of a five-wave impulse, which culminated in the top of wave V of (I) in 2014. The theory states that every impulse is followed by a three-wave correction in the opposite direction. Usually, the retracements end in the termination territory of wave IV of the impulsive sequence. So, it seems the weakness to 47.10 is unlikely to be the entire wave (II). Instead, we believe EQT stock should soon resume its fall and decline to the area between 30 and 20 dollars a share in the long term. Additionally, the relative strength index is also giving us a warning sign in the form of a bearish divergence between waves III and V of (I). If this is the correct count, it is not a good time to put your money in EQT Corporation stock. Better safe than sorry.
