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T Rowe Price Vulnerable After Fibonacci Encounter

Founded in 1937 and based in Baltimore, Maryland, T Rowe Price is one of the largest asset management companies in the world. At the end of Q1 2019 its assets under management stood at $1.11T. That is T for trillion.

Besides, T Rowe Price is also a public company which is why it is of particular interest to us today. It turns out even this industry behemoth is not immune to the whims of the market. TROW lost over 33% of its market value in the second half of 2018, falling from an all-time high of $127.43 to $84.59.

And while the S&P 500 managed to reach a new all-time high in 2019, T Rowe Price is still trading below its June 2018 record. According to the Elliott Wave analysis below, this doesn’t mean it is a bargain.

T Rowe Price draws a bearish Elliott Wave Setup

The 4-hour price chart of the stock reveals that the plunge in H2 2018 has taken the shape of a five-wave impulse. It is labeled 1-2-3-4-5, where the sub-waves of wave 3 and (iii) of 3 are also visible.

Elliott Wave Setup Puts T Rowe Price Stock Under Pressure Again

A three-wave correction in the other direction follows every impulse. In TROW’s case, a W-X-Y double zigzag emerged from the December 2018 low to lift the price to $111.73 in April. The price has been sliding in recent weeks and it looks like wave (B) ended precisely at the 61.8% Fibonacci level.

The theory states that once the 5-3 wave cycle is complete, the price heads in the direction of the five-wave sequence. T Rowe Price is an established and well-managed company so it wouldn’t make sense to expect a huge crash. Still, wave (C)’s targets lie beneath the end of wave (A) which makes a decline to $80 or $75 a share plausible. Judging from the chart above, we think it is better to wait for another ~25% drop before joining the bulls in TROW stock.

Did you like this analysis? 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!

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