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Should Investors Trust Pfizer?

It has been more than a year since we last wrote about Pfizer Inc. On March 28th 2014, the stock was trading around 32.40, but the Elliott Wave Principle was warning us about a probable reversal to the downside. The chart below shows how things looked like, when we published “Pfizer Inc. At The End Of The Road”.
pfizer-inc.-daily
Our bearish outlook was supported by two consecutive patterns. A triangle in the position of wave (4) and an ending diagonal for wave (5). So, despite Pfizer’s multi-year advance, we decided to stick to the wave analysis. Was this the right thing to do? Find the answer on the next chart.
pfizer daily 2.4.15
Yes, it was. The price of Pfizer’s shares fell from 32.66 to 27.50 in less than seven months. In October 2014, the bears got tired and the rally resumed. Last week, Pfizer Inc. stock reached 35.40. But is it going to get even more expensive? Is this the right time to invest in Pfizer? In our opinion, the answer to both questions is “no”. The following chart explains why.
pfizer weekly 1.4.2015
As visible, Pfizer has drawn a nicely-looking five-wave impulse to the upside, starting from the bottom in 2009. According to the theory, every impulse is followed by a three-wave correction in the opposite direction. This means we should expect a significant decline, once wave V is over. If this is the correct count, now could be the worst possible moment for an investment in Pfizer stock.



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