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GTX Stock May Recover, but Remains Under Pressure

With a market cap of just over $1B, Garrett Motion Inc. is still considered a small company. Founded less than two years ago in Rolle, Switzerland, the company provides electric-boosting technologies for light and commercial vehicle manufacturers. In September 2018, GTX stock started trading on the NYSE.

It was hovering in the vicinity of $20 a share in April, but has been drifting lower ever since. Last week, the price breached the $14 mark and fell to $13.61. Apparently, it didn’t take too long for GTX stock to produce a clear Elliott Wave pattern.

GTX stock forming a textbook Elliott Wave impulse

As visible from the chart above, Garrett’s decline from $19.71 to $13.61 is a textbook five-wave impulse. It is labeled 1-2-3-4-5, where the sub-waves of wave 3 are clear, as well. In fact, the impulsive structure of waves (iii) and (v) of 3 can be recognized, too.

The market has taken the guideline of alternation into account in wave 3. Wave (ii) is an expanding flat correction, while wave (iv) is a simple zigzag. But the most important thing is that impulse patterns point in the direction of the larger trend. Garrett’s impulsive decline from $19.71 means GTX stock is in a downtrend.

On the other hand, a three-wave correction in the other direction follows every impulse before the larger trend can resume. Here, we can expect a three-wave recovery in wave (2/B) up to $16-17, followed by more weakness in wave (3/C) to a new low.

Did you like this analysis? 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!



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