We’ve already shown readers how Elliott Wave analysis helped us predict the sharp recovery in PNC Financial back in June, 2020. By April, 2021, the stock had risen by 70% and was hovering at new all-time highs around the $180 mark. Another look at the structure of the pandemic recovery suggested $200 was within reach, but a correction to $150 should then be expected. That was over two years ago.
Fast-forward to today, PNC trades an hair above $120 a share after having topped at $228 in January, 2022. Obviously, while most investors were bullish in the spring of 2021, we weren’t bearish enough. The important thing is that the charts helped us position us for both the initial surge and the following crash. Now, after the failure or forced acquisition of several banks on both sides of the Atlantic, is PNC a good bet? The updated chart below gives us a hint.
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The 52% decline from $228 to $110 looks like a textbook A-B-C zigzag retracement. Waves A and C are clear impulse patterns, marked 1-2-3-4-5, while wave B is an a-b-c-d-e triangle correction. According to the theory, once a correction is over the preceding trend resumes. In the case of PNC Financial, the preceding trend was up, so it makes sense to expect more upside going forward.
Barring another major banking panic and a run on deposits, PNC should be safe. It is a leading regional bank, whose stock trades at less than 9 times earnings. Paired with the bullish Elliott Wave setup shown above, it strikes us a good investment. Not as good as the 18 other stocks we currently hold in our portfolio, though.
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