close icon

WPP Stock Bulls Ready to Fight Back

On July 10, 2017, WPP stock was trading above $101 a share on the New York Stock Exchange, down from its all-time high of $123.33 reached in May, 2015. Despite being down 17.9% already, the Elliott Wave Principle suggested the stock is likely to “lose 30% from current levels”, so we wrote an article to warn investors about it. The chart, which led to our negative outlook nine months ago, is shown below.

wpp stock elliott wave analysis

WPP is not a bad business and made a record profit of 1.82 billion pounds last year. Unfortunately, the fundamentals often mean nothing to the market. In that case, a five-wave impulse pattern from the low at $22.35 in December 2012 to the top in May 2015 was supposed to be followed by a three-wave decline of the same degree. The support near $70 a share looked like a reasonable bearish target at the time. The next chart shows how WPP stock price has been developing during the last nine months.

wpp stock elliott wave analysis update

The company has not lost 30% of it market capitalization yet, but it did fall to $76.68 on March 23rd, 2018 for a 24.4% plunge since July 2017, bringing the total decline since May 2015 to 37.8%. The three-wave retracement did not develop as a flat correction. It looks more like a W-X-Y double zig-zag with a triangle in wave X. This is irrelevant for the future outlook, though, because flat or zig-zag, the 5-3 wave cycle is now complete. According to the theory, the trend should now resume in the direction of the impulsive sequence, meaning the market is finally going to show some appreciation for WPP’s improving business performance.

In addition, the W-X-Y correction has been developing within the parallel lines of a corrective channel, whose lower line can be expected to discourage the bears. The Relative strength index also supports the positive outlook with a bullish divergence between waves “a” and “c” of Y. If this count is correct, WPP stock is ready to return to its past glory and reward the patience of its investors.



Stay informed with our newsletter

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

Privacy policy
You may also like:

CVR Energy Remains a Solid Long-Term Oil Play

Almost two years ago, on September 12th 2016, we published an article about a little known oil refiner, whose stock price had plummeted by over 82% in just over three years. The company’s name was CVR Energy Inc. and its crash of course coincided with the great selloff in crude oil prices. And while others…

Read More »

Glencore’s Subpoena Plunge in Elliott Wave Context

Glencore, the world’s largest cobalt miner, plunged by as much as 13% in intraday trading on Tuesday after the news spread that the company has received a subpoena from the U.S. Department of Justice. Authorities are requesting documents regarding Glencore’s business in Congo, Venezuela and Nigeria as the company is under suspicion of corrupting government…

Read More »

Bank of America Deserves a Higher Valuation

Bank of America is having a great year so far. The mega bank beat earnings and revenue estimates in the first quarter and was one of the top performers during the Fed’s recent stress test, which allowed it to boost its dividend by 25% and further support its share buyback program. In addition, the company…

Read More »

Barratt Stock Decline Not a Buy-the-Dip Opportunity

Barratt Developments PLC is the largest house-builder in Great Britain. Founded in 1958, the company acquires land and plans, designs, constructs, develops and sells homes in the United Kingdom. Similarly to many home-building companies, Barratt had a tough time during the housing crisis. The stock, which trades under the ticker symbol BDEV on the London…

Read More »

3M Stock to Give Investors a Chance to Evacuate

2018 is nothing like 2017 so far for 3M stock investors. The share price reached an all-time high of $259.77 on January 26th, but has been steadily declining in the past five months, losing over 26% at one point in May. If you have been following us for at least two years, you probably know…

Read More »

PZZA Stock Chart Hides an Elliott Wave Message

Papa John’s International, founded in 1984 and headquartered in Louisville, Kentucky, operates approximately 5 200 pizza restaurants globally. The company went public on the NASDAQ stock exchange in 1993 under the ticker symbol PZZA and reached its all-time high of $90.49 in December 2016. Unfortunately, no trend lasts forever and PZZA stock was a big disappointment…

Read More »

JNJ Stock Preparing for a Bullish Breakout

JNJ stock did not start the year in the best way possible. The share price fell from an all-time high of $148.32 on January 17th to as low as $118.62 on May 29th, erasing 20% of the company’s market capitalization. Such declines come to remind us that even the best of blue chip stocks do…

Read More »

More analyses