Haleon Stock Approaching the End of Correction

Bullish   

Headquartered in Weybridge, UK, Haleon Plc is a leading consumer healthcare products company. The company owns multiple brands, including Centrum vitamins, Sensodyne toothpaste and Panadol. It came into being after GSK and Pfizer merged their consumer healthcare divisions in 2019 and then spun them off in 2022. Earlier this month, Pfizer reduced its shareholding from 32% to 24%, while GSK sold most of its shares in October, 2023.

The stock began trading in London in July, 2022. By September, 2022, the price had tumbled by a third, before recouping all of its losses and then some by April, 2023. Almost a year later now, Haleon is down 12% from its record, which is quite understandable given that its two biggest shareholders – GSK and Pfizer – have been unloading their stakes.

There is light at the end of the tunnel, though, as selling pressure from these two pharma giants is now going to subside. Not to mention that the daily price chart of Haleon shows an almost complete Elliott Wave cycle. Take a look at it below.

Haleon stock daily chart Elliott Wave analysis

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The recovery from 241 to 358 pence a share can be seen as a textbook five-wave impulse pattern, labeled (1)-(2)-(3)-(4)-(5). Two lower degrees of the trend can be recognized within wave (3) and the five sub-waves of wave (5) are also visible. A three-wave correction follows every impulse and that’s exactly what has been going on since the top in April, 2023.

Haleon ‘s retracement seems to be taking the shape of a simple (a)-(b)-(c) zigzag, where wave (b) is a triangle correction, marked a-b-c-d-e. If this count is correct, the bears are currently working on wave (c), which can potentially drag the stock below the 300 pence mark. Investors shall not despair, though, because once a correction is over, the preceding trend resumes. In other words, Haleon can be expected to head north again as soon as wave (c) has ended. Long-term targets above 360 GBp make sense.

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