Yahoo Inc.(YHOO) is suffering one of its worst periods ever, as CEO Marissa Mayer is pressured by investors to sell the company’s core business. So, there is no surprise Yahoo’s shares have been falling recently. But what is interesting here is the fact, that if we take a look at the daily chart of the stock, we will see that the sell-off actually began in November 2014. Things were not looking so bad back then, but the stock started plunging anyway. Could it start recovering now, despite all the headaches? The Elliott Wave Principle suggests it could.
As the chart shows, Yahoo’s whole downtrend since late-2014 takes the shape of a five-wave impulse. According to the theory, every impulse is followed by a correction in the opposite direction. In other words, a three-wave recovery could be expected now. Realizing the difference between a company and its stock is vital here. While there seems to be no end in sight for Mayer’s troubles, there is no reason why Yahoo! stock could not rise. And if we apply the Wave Principle’s logic that the market causes the events and not the opposite, Yahoo Inc. could catch a break as well.
