Simon Property Group is scheduled to report its Q4 2021 earnings after the market close today. The company exceeded expectations and raised its dividend three times in 2021. Investors are surely hoping for a similar outcome in the fourth quarter.
Meanwhile, the stock has recouped all its pandemic losses and is up 245% from its March 2020 bottom. Should we anticipate another surge following today’s report? The Elliott Wave chart below gives us a hint.
Simon ‘s daily chart reveals the 2016-2020 bear market that saw the price collapse from $226 to $42. What interests us more, though, is the subsequent recovery. It looks like an incomplete five-wave impulse pattern. Waves 1-through-4 seem to be in place already, but wave 5 is still missing.
Wave 4 looks like a textbook a-b-c zigzag correction. Furthermore, the price is now trying to turn the recently breached resistance line into support. Maybe today’s report is going to help the bulls succeed at that task. Wave 5 is supposed to exceed the top of wave 3, so targets near $180 a share make sense.
Once there, however, the impulsive sequence from the bottom at $42 would be complete. According to the theory, a three-wave correction should follow. If this count is correct, investors should not be surprised to see another pullback to ~$130 in wave (2) before the uptrend can continue.
Disclosure: The author holds a long position in Simon Property stock.
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!