close icon

You Should Not Have Trusted Pfizer

In the beginning of April 2015, Pfizer was surging towards the $35 mark, after an exceptionally strong six-year uptrend. However, one of the most important things in trading and investing is to remember that no trend lasts forever. That is why one needs a forecasting method, in order to be able to predict when the trend might reverse. The method we have chosen is called the Elliott Wave Principle. Six months ago, on April 2nd, it warned us about Pfizer Inc. stock. In an article, called “Should Investors Trust Pfizer?”, we shared our bearish views by saying that “we should expect a significant decline, once wave V is over.” The chart below shows how the stock looked like back then.
pfizer weekly 1.4.2015
The theory states that trends develop in repetitive patterns. A five-wave impulsive pattern, like the one Pfizer drew between March 2009 and July 2015, should be followed by a three-wave correction in the opposite direction. That was the only reason why instead of becoming more and more bullish as Pfizer rallied, we decided to take a step back and prepare for a significant decline once wave V was finally over. The next chart shows how the situation developed.
pfizer 2.10.15
As visible, the stock continued a little higher and reached $36.43. Nevertheless, the bulls were still in trouble, but had no idea about it. Our fears became a reality on August 24th, the “Black Monday”, when Pfizer Inc. stock fell as low as $28.47. And, in or opinion, this is just the start, since this sell-off does not seem to be large enough to be the whole correction we are expecting. It is likely to be only the first part of it – wave A. If this assumption is correct, Pfizer still has a lot of falling to do,  before the stock is worth investing in again.

Stay informed with our newsletter

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

Privacy policy
You may also like:

Plus500 Confirms Uptrend, but Correction is Likely

Based in Haifa, Israel, Plus500 (LSE:PLUS) operates a leading CFD trading platform. The company is part of the FTSE 250 index and conducts most of its business in Europe and Australia. The new ESMA regulations which came in effect in August 2018 severely impacted the CFD trading industry. As a result, Plus500 stock fell from…

Read More »

Moody’s, a Buffett Darling, Trading in Late Fifth Wave

Moody’s Corp. has been a long-time holding in the Berkshire Hathaway portfolio. It is also the seventh biggest position in it as of the end of March 2020. The company has a strong competitive advantage, it is highly profitable and growing. No wonder Warren Buffett likes it so much. The stock did decline sharply in…

Read More »

Dollar General Stock Bulls are Looking for Trouble

As a general merchandise discount retailer, Dollar General was among the handful of businesses that actually benefited from the pandemic. People piled on necessities preparing for what looked like the end of the world for a while. As a result, sales at Dollar General surged in the midst of the crisis. While its stock price…

Read More »

Veeva Systems Stock Trades in Bubble Territory

It is true that the Fed’s recently re-adopted zero rate policy and stimulus are distorting financial markets. Interest rates are like gravity to financial assets. The lower the rate, the higher asset prices go and vice versa. As a result, stocks in general tend to ignore the economic reality right now. Among the companies trading…

Read More »

PNC Financial Completes Bullish Elliott Wave Cycle

Economic crises have always been especially tough on financial companies. Usually, when the general market is falling, financial stocks are crashing even harder. PNC Financial for example, lost 81.6% in the 2008-9 recession, while the S&P 500 fell by “just” 58%. PNC Financial stock suffered more than the general market during the recent coronavirus selloff,…

Read More »

Avoiding the 54% Crash in Brookfield Partners

When we last wrote about Brookfield Partners, the stock was hovering around $44 a share. That was on July 27th, 2019. Back then we though the price can reach $50, but instead of celebrating, the bulls should be getting ready to leave. The reason for our skepticism wasn’t some special insight into the company’s operations…

Read More »

Alphabet Stock To $1700 and… Below?

Similarly to the market at large, Alphabet stock felt the tremors caused by the coronavirus panic. The Google parent’s share price fell from $1531 to $1009 between February 19th and March 23rd. One of the biggest and strongest companies in the world lost 34% of its value in a little over a month. However, thanks…

Read More »

More analyses