close icon

Verizon: The Worst DJIA Stock of 2017

According to a report by Yahoo, Verizon stock is the worst performer among the 30 stocks within the Dow Jones Industrial Average so far in 2017, after the share price of the telecom giant is down by over 18.5% this year. And indeed, Verizon finished 2016 close to $53.40 a share. Last week, it fell to as ow as $43.21.

And while there might have been plenty of fundamental reasons for VZ’s fall, such as its over-leveraged balance sheet or high price to earnings ratio, hardly anyone expressed any concerns while the stock was still trading above $50. We did.

Back in August, 2016, while the stock price was slightly below $53, we published “Verizon Has a Bright Future, But…”, where the following chart was included.

verizon elliott wave chart august 19 2016

Almost a year ago, the weekly price chart of Verizon stock allowed us to recognize a complete five-wave impulse up from the bottom in 2008. According to the Elliott Wave Principle, a three-wave correction in the other direction follows every impulse. In addition, there was a bearish RSI divergence between waves III and V. So, instead of joining the bulls near $53 a share, we thought investors should be careful, because the stock was on the verge of a significant pullback, probably down to the support area of wave IV. It is July, 2017 now, and this is an updated chart of Verizon Communications Inc.

verizon elliott wave chart 1

It is true that the plunge between $56.95 and $43.21 already has a three-wave structure, which in theory means the 5-3 wave cycle is complete and the uptrend should be expected to resume. But it is also true that the current decline is quite small relative to the preceding impulse. Therefore, we believe one of the following scenarios is more likely.

verizon elliott wave chart 2

The first alternative suggests that wave C of (II) is not over just yet and should extend further to the downside until reaching the mid-$30s. The other equally probable count suggests that Verizon’s correction could extend more in terms of time than in terms of price, as shown below.

verizon elliott wave count 3

If the market chooses this count, wave (II) could evolve into a more complex W-X-Y double zig-zag correction from now on. Then, the recent three-wave slump would turn out to be just the first phase – wave W – which should be followed by a three-wave recovery in wave X and then another three-wave decline in wave Y. To be honest, we like this count most, because it includes the time factor into the picture. Time will tell which one the market is going to pick, but chances are Verizon’s troubles are not over yet.

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

MongoDB – Bearish Pattern Joins Nosebleed Valuation

MongoDB Inc. is a general purpose database platform developer and provider. The company was founded in 2007, but only came public ten years later – in 2017. During the following four years, the stock has risen from an IPO price of $33 to $515 a share as of last week. So, it is fair to…

Read More »

Pandora Does Things Right. Stock May Need a Breather

When we wrote our previous article on Danish jewelry maker Pandora in December, 2020, the stock was up over three-fold since March. That recovery from DKK 180 to DKK 651 didn’t not come out of the blue, though. It was the result of a bullish setup we managed to identify as early as July 2019.…

Read More »

Match ‘s SP500 Inclusion a Good Excuse to Reach $200

Match Group Inc. rose over 10% in post-market trading Friday following reports that it is going to be included in the S&P 500. The company, which owns Tinder, OkCupid and most other major dating apps in the U.S., has a market cap of over $41B. Despite the anticipated “summer of love”, though, this is not…

Read More »

Cameco Stock Seems to Have Finally Turned a Corner

Uranium spot prices are on the verge of breaking above $34/lb, up over 80% from the bottom of $18/lb reached in late-2016. Cameco, as one of the world’s top uranium producers, is now seeing its stock price rising in tandem. Yesterday, it closed at $19.16 after reaching $21.95 in June. We first covered Cameco in…

Read More »

A Fresh Look At Cigna ‘s Elliott Wave Super Cycle

In a case study article on Cigna, published in October, 2016, we examined how a fundamentally sound and undervalued stock can still drop nearly 90%. The reason for that crash didn’t lie in some company specific issue. Rather it happened to occur during the biggest financial crisis in 80 years. Nevertheless, we made the point…

Read More »

CBOE Takeover Rumor Lifts Stock to Elliott Wave Target

We first wrote about CBOE Global Markets less than eight months ago. The S&P 500 had already recouped all its COVID selloff losses and was hovering at new all-time highs. CBOE, in contrast, was still down 30% from its 2018 record, trading below $97 a share. For some reason, the market was ignoring the company’s…

Read More »

Ahead of Ulta Beauty ‘s 150% Gain Since Lockdown

Buying shares in a beauty retailer in March 2020 sounded like a crazy, stupid idea. Stock markets around the world were plunging at a record pace amid a global GDP crash resulting from government-enforced lockdowns. People were stockpiling necessities in preparations not to leave their homes in the foreseeable future. With COVID-19 cases rising everywhere,…

Read More »

More analyses