Economic crises have always been especially tough on financial companies. Usually, when the general market is falling, financial stocks are crashing even harder. PNC Financial for example, lost 81.6% in the 2008-9 recession, while the S&P 500 fell by “just” 58%.
PNC Financial stock suffered more than the general market during the recent coronavirus selloff, as well. While the S&P 500 plunged 35%, PNC erased half of its value. The share price was hovering around $160 in January before dipping below $80 in March.
Fortunately for PNC’s bruised shareholders, the stock participated in the following recovery and is now closing in on $110. Can the rally continue? Let’s see if our Elliott Wave analysis of the weekly chart below can help us answer that.
The chart puts the recent crash in PNC Financial in the context of its post-2009 progress. It seems to fit perfectly in the position of wave C within a larger A-B-C flat correction. This retracement, in turn, follows a clear five-wave impulse.
The pattern is labeled 1-2-3-4-5, where the sub-waves of the third wave are also visible. Taken together, the impulse and the correction form a complete 5-3 wave cycle. The Elliott Wave theory states that we can now expect the trend to resume in the direction of the impulsive sequence. If this count is correct, the bulls should be able to lift PNC Financial to new records in the long-term.
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!