When we wrote about Klépierre in late-November, 2021, the stock was hovering near €19.20 a share. The stock’s 4-hour charts allowed us to identify a clear Elliott Wave setup pointing north. Coupled with the mall REIT’s improving fundamentals and undervaluation, we thought targets north of €30 made sense. And indeed, by mid-February, 2022, Klépierre stock was already in the vicinity of €27.
Alas, reaching our target from the first try just wasn’t meant to be. As of this writing, Klépierre trades below €20 again, at roughly the same price level it did more than seven months ago. Of course, the recent downturn reflects investors’ negative mood following Putin’s invasion of Ukraine. And while we strongly condemn Russia’s unprovoked aggression, it hasn’t affected Klépierre ‘s business in any material way.
This means the current weakness is most likely a buying opportunity. Where does it fit into the Elliott Wave count, though? Are the charts sending a bullish message, as well? Let’s take a look.
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The updated 4-hour chart of Klépierre stock reveals the same five-wave impulse from €10.05 to €25.93 we identified back in November, 2021. Every impulse is followed by a three-wave correction. Here, the price drew a simple a-b-c zigzag down to €17.93, whose wave ‘a’ is a leading diagonal. Wave (2/B) could’ve ended right then and there.
Instead, after allowing the bulls to run up to €26.88, the market stopped them in their tracks. That surge was limited to a three-wave a-b-c structure again, marked as wave B. This meant wave (2/B) was likely still in progress as an expanding flat correction. If this was going to be the case, a five-wave drop in wave C was supposed to complete the pattern.
A “five-wave drop” can mean an impulse or a diagonal. In Klépierre ‘s case, the market seems to have picked the latter. The decline from €26.88 to €17.68 looks like an ending diagonal, labeled 1-2-3-4-5. Waves 1 and 4 overlap and the pattern has the familiar contracting shape. If this count is correct, wave (2/B) is finally over at €17.68. Higher levels towards €30-€35 a share in wave (3/C) can be expected.
Disclosure: Klépierre S.A. is part of the EWM Interactive Stock Portfolio. There are 17 other positions in it that have yet to realize their full potential, as well. Curious to read about them? Download the portfolio now!
