close icon

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 shareholders, the bulls could not keep that momentum any longer. The past four years brought the exact opposite in terms of returns. In October 2019, Linamar stock fell to C$35.33, down 60.5% from its June 2015 top. The chart below puts the last ten years into Elliott Wave perspective.

Linamar Stock completes bullish Elliott Wave cycle

The company’s weekly price chart reveals a textbook Elliott Wave cycle. The recovery to C$89.42 is a five-wave impulse pattern labeled 1-2-3-4-5. It is followed by an A-B-C zigzag correction down to the 61.8% Fibonacci level. According to the theory, the price can now be expected to move in the direction of the five-wave sequence.

If this count is correct, 2020 is shaping up to be a great year for Linamar investors. Targets above C$90 seem reachable in the long-term. With the stock currently below C$50, the bulls can lift the price by 80% or more in the next couple of years.

On the other hand, Linamar remains a cyclical company. This means that its profits are highly dependent on the state of the world economy. For instance, Linamar swung from a C$109 million profit in 2007 to a C$47 million loss in 2009. As another recession lurks around the corner, investors must proceed with caution even with a promising Elliott Wave pattern in place.

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