We last wrote about Walgreens stock on November 11th, 2019. Shares were hovering around $62 after news that KKR’s was willing to take the company private. It was going to be the largest leveraged buyout in history.
We, on the other hand, were more interested in what was going to happen with the stock in the absence of a deal. So, we turned to Elliott Wave analysis in our search for an answer. The chart below, published almost four months ago, shows that KKR really was the bulls’ final hope.
Walgreens’ 4-hour chart revealed a textbook 5-3 wave cycle. There was a five-wave impulse between $86.31 and $49.03, followed by a simple a-b-c zigzag up to $64.50. This pattern meant that unless KKR managed to complete the takeover, pure market forces were going to drag WBA below $50 again.
Unfortunately for the bulls, it soon became evident that financing the deal would be problematic even for KKR. The market quickly lost confidence and Walgreens stock started sliding again.
The price fell to $44.61 last week, down 28% since November 11th. In that case, an Elliott Wave pattern proved more reliable than the third biggest private equity company in the world.
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!
