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NovoCure to Shed Another 40% After Today’s 15%

Founded in 2000, NovoCure develops treatment for tumors using specific frequencies to disrupt cancer cell division. The company went public in 2015 and, after a disappointing 2016, has been making investors very happy ever since.

On the other hand, the stock is down over 15% today despite positive TTFields liver cancer study results. Normally, an illogical market reaction like this one would be seen as a buying opportunity. A quick look at the chart below, however, makes us think that is not the case here.

NovoCure Stock can lose another 40% in Elliott Wave Correction

NovoCure ‘s daily chart reveals that the uptrend from below $6 to almost $233 a share is a complete five-wave impulse. The pattern is labeled I-II-III-IV-V, where the five sub-waves of wave III are visible, as well. What the bulls should worry about is that a three-wave correction follows every impulse.

Corrections usually erase the entire fifth wave and reach the support area of the fourth. This means today’s tumble might be the start of a bigger decline in NovoCure stock. If this count is correct, we can expect more weakness towards ~$120. From current levels, that is a drop of nearly 40%.

Besides, NovoCure ‘s valuation was too high to begin with. Even after today’s plunge, the stock trades at 2021 price to sales of 40. Paying such a high price means good results for patients might not translate into good results for investors.

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!



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