close icon

HollyFrontier Concluding a Bearish Elliott Wave Cycle

HollyFrontier Corp. is an independent petroleum refiner with a market cap of roughly $8.8 billion. The stock reached an all-time high of $83.28 a share in June 2018. By late-May 2019, it was barely able to hold above $37, losing nearly 55% in just one year.

However, HFC recovered significantly in the last four months. The stock closed at $53.34 yesterday, up by over 41% since the beginning of June. Is this the beginning of a larger uptrend or just a corrective rally within the larger selloff? Let’s examine the chart below from an Elliott Wave perspective and see what we’ll find.

Bulls should worry about this Elliott Wave pattern in HollyFrontier stock

The daily chart of HollyFrontier reveals that the decline from over $83 to under $38 formed a five-wave impulse pattern. It is labeled 1-2-3-4-5 and shows several Fibonacci relationships between the waves. Wave 2 retraced 61.8% of wave 1, wave 3 is 1.618 times longer than wave 1 and wave 4 retraced 38.2% of wave 3.

A Double Resistance Awaits HollyFrontier Stock near $60

The theory states that a three-wave correction in the other direction follows every impulse before the trend resumes. That is exactly what we believe the recovery from $37.73 represents – a simple A-B-C zigzag retracement. While the impulse in wave (A) unfolded within a trend channel, wave (B) seems to be developing in a corrective channel.

This means HollyFrontier bulls are about to face a double resistance near $58 a share in wave C of (B). It is formed by the termination area of wave 4 of (A) and the upper line of the corrective channel. If this analysis is correct, we can expect more weakness in wave (C) once wave C of (B) completes the 5-3 wave cycle.

A bearish reversal can be expected between $55 and $60 a share. Then, wave (C) should be able to drag HollyFrontier to at least $30 a share. In other words, despite being down 36% since June 2018, HFC can still lose half its market value. Given how its results suffered in 2008 and 2009, this is hardly a company investors would like to own with another recession on the horizon.

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!



Stay informed with our newsletter

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

Privacy policy
You may also like:

Humana Completes a Pattern it Started 20 Years Ago

It’s been eight months since we last wrote about Humana. The stock was hovering around $260 in May 2019, following a plunge from as high as $356. And while there were plenty of things to worry about, a combination of Elliott Wave and Fibonacci analysis made us optimistic about Humana’s prospects. Instead of joining the…

Read More »

JNJ Stock Pattern Suggests Uptrend is Almost Over

Despite its top quality, Johnson & Johnson didn’t fully participate in the post-2009 bull market. JNJ stock is up 224% since the bottom of the Financial Crisis, while the Dow Jones added 354% in the same period. However, JNJ stock climbed to a new all-time high last week in a breakout that makes the bulls…

Read More »

Steel Dynamics Completes Bearish Wave Setup

Steel Dynamics stock climbed 40% throughout the second half of 2019. The share price rose from $25 to almost $36, but that’s after a decline from $52.10 in May 2018. In other words, despite the recent recovery STLD is still down 36.7% in the past 19 months. Can the steel manufacturer stock’s revival continue or…

Read More »

Spirit AeroSystems Not an Elliott Wave Bargain Yet

In the ten years between November 2008 and January 2018, Spirit AeroSystems stock surged 1373%. The rally from $7.14 to $105.20 made anyone who happened to catch even a part of it quite happy. The following two years, on the other hand, not so much. Spirit AeroSystems is down by a third in the last…

Read More »

Shopify Investors Probably Believe in Unicorns, Too

Shopify is a cloud-based commerce platform founded in 2004 and headquartered in Canada. Its market cap is approaching $50 billion, even though the company is not yet profitable. We know from history that profits determine a business’ success in the long-term. In the short run, however, investors’ emotions is what makes a stock rise or…

Read More »

EssilorLuxottica To Lose a Third in Elliott Wave Drop

EssilorLuxottica came into existence in October 2018 after the French Essilor acquired the Italian Luxottica in a $24 billion deal. The merger resulted in the world’s largest eyewear company with a market cap of roughly 60 billion euro. Listed on the Euronext Paris stock exchange, EssilorLuxottica is part of the French CAC 40 and the…

Read More »

Linamar ‘s 2020 is Shaping up to be a Great Year

Founded in 1966, Linamar Corp. is the second-largest automobile parts manufacturer in Canada. The stock is listed in Toronto and had an exceptionally strong run between 2009 and 2015. In a little over six years, the share price rose from as low as C$2 to as high as C$89.42. That’s 88.4% compounded annually. Unfortunately for…

Read More »

More analyses