close icon

Five Months Ahead of HollyFrontier ‘s Collapse

Oil stocks plunged across the board Monday following an epic OPEC+ negotiations failure. The price of oil was down over 31% yesterday after Saudi Arabia launched an all-out price war. One of the many casualties was HollyFrontier, which we covered over five months ago.

HFC tumbled almost 16% to close Monday’s session at $24.10. And while the oil price war was a true black swan, HollyFrontier ‘s selloff wasn’t such a big surprise. In fact, when we wrote about it in late-September 2019, the stock was “concluding a bearish Elliott Wave cycle.” Take a look at it below.

HollyFrontier stock can lose half its value

Five and a half months ago, HollyFrontier’s daily chart revealed an almost complete 5-3 wave cycle. A five-wave impulse to the south between $83.28 and $37.73 in wave (A) was followed by a simple A-B-C zigzag in wave (B). According to the Elliott Wave principle, the downtrend was supposed to resume once wave C of (B) ended.

This made us conclude that “despite being down 36% since June 2018, HFC can still lose half its market value.” A bearish reversal near $60 a share was supposed to trigger another selloff in wave (C) to $30 and below. The updated chart below visualizes what no HollyFrontier shareholder wants to see.

HollyFrontier crashes 60% in less than six months

Wave C of (B) peaked at $58.88 in late-October 2019. The upper line of the corrective channel proved too solid for the bulls to breach. The lower line, on the other hand, gave up in the first days of 2020. From then on, there was nothing to stop the bears.

As visible, HollyFrontier stock was already in the doldrums by the time the OPEC-Russia negotiations collapsed. The oil price war simply accelerated the decline. The Elliott Wave patterns, however, warned investors that a crash was coming before it even started. Those who cared to look, at least.

In the meantime, the world keeps consuming about 100 million barrels of oil per day. HollyFrontier survived the 2008 and 2016 downturns. It is not overly-indebted now and should be able to survive this one, as well. We don’t think this stock is going to zero. Assuming wave (C) roughly equals wave (A) a bullish reversal in the mid-teens seems likely.

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:

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 »

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.…

Read More »

More analyses