“Procter and Gamble” finished 2014 with fireworks, flying high towards $94. Unfortunately, 2015 has been singing a different song so far. In the middle of March, the stock fell below $81. Let’s check what is going on by looking at a price chart and see if we could recognize an Elliott Wave pattern.
It seems, that this 13-dollar decline takes the shape of a perfect five-wave impulse with a triangle in wave 4. According to the Wave Principle, every impulse is followed by a three-wave correction in the opposite direction. There was a recovery to $85, but it looks far too shallow to be the whole retracement. That is why we suppose wave (2/B) is going to extend. The first scenario, shown above, suggests a double zig-zag, labeled w-x-y. If the market chooses this development, “Procter and Gamble” should go higher in wave “y” before wave (3/C) forces it down again. The second count carries almost the same message. The next chart visualizes it.
The second scenario comes up with the idea of an expanding flat correction for wave (2/B). This would mean “Procter and Gamble” is currently in wave B, which has to make a new low, before wave C to the upside begins. Only after its end, we could expect the resumption of the downtrend in the face of wave (3/C). In conclusion, both counts are bearish, because of the five-wave decline from $94 to 81$. The only question is what type of correction wave (2/B) is going to be. It is up to the market to decide.
