L’Oreal bottomed in March 2009 at a price of below 46 euro per share and has been in a strong uptrend ever since. In April 2013 the stock reached nearly 138 euro per share – top, which has not been touched again so far. With current prices around 127, we will take a look at the weekly chart of L’Oreal’s stock through Elliott Wave perspective, in order to get an idea about probable future developments.
The chart shows an unfinished impulsive five to the upside. Fifth waves are never guaranteed, but this one looks highly probable. Normally, if there is not a truncation, we would expect a new high above the one made by wave 3. This means that prices could reach the vicinity of 142 euro per share. However, if this happens, it is likely to be the last top for L’Oreal for the next two or three years, because after every five waves, a three-wave correction follows. A correction, which could bring prices back down to the psychological level of 100, before the uptrend resumes again.
