Many Elliotticians believe that the US stock market is nearing the end of fives waves up from the 2008/9 low. We already looked at Boeing (BA), 3M (MMM), American Express (AXP), and Goldman Sachs (GS). Let’s take a look now at another Dow 30 component, Wal-Mart (WMT).
The following is my Elliott Wave interpretation of Wal-Mart stock (ticker WMT) utilizing a combination of Elliott Wave and its associated Fibonacci price targets, as well as Hurst cycle analysis, starting with a monthly chart, and then zooming in a bit via a weekly chart. (Click on the charts to enlarge).
Wal-Mart stock rallied very strongly starting from its IPO back in 1970 all the way through December 1999. There was a small dip in 1987, and a slightly longer lasting sideways pause from 1993 to 1996, but it wasn’t until WMT hit $70.25 in December 1999 that it finally stopped moving strongly to the upside. Starting at that late 1999 top, Wal-Mart carved out a decade-long wave 4 triangle, which ended in February 2009. The rally from that date through January 2015 occurred in 5 waves, and that top may have been the highest high that Wal-Mart stock will ever see. Very importantly, the strong move down that followed in WMT through November 2015 was a 5-wave impulse. From an Elliott wave perspective, that 5-wave structure is the start of a larger move to the downside in Wal-Mart stock. More recently, the recovery from that low has carved out a 3-wave, ABC looking structure.
On the weekly chart, we can see that Wal-Mart stock has rallied recently from the January 2017 low in 5-waves, but only inside a black C wave to complete a zigzag correction in my opinion. If my Elliott wave count is correct, WMT should peak between $82.52 and $84.17, and according to Hurst cycle analysis, that important top is expected this month (Aug 2017). At $82.52, blue (minor) wave 5 will equal the net traveled by blue waves 1 through 3 times a very common .618. Those 5 blue waves would complete black wave C, and therefore the entire correction up from the November 2015 low. Also, at $84.17, black (intermediate) wave C will equal black wave A, a very common equality relationship within a corrective zigzag structure. As you can see from the chart, Hurst analysis (via Sentient Trader software) is expecting the next leg to the downside to last through late next year (2018), and possibly on into 2019.
Conclusion: Five waves up from the 2009 low finished over two years ago in Wal-Mart stock, and the price action since that high is not suggesting further upside continuation beyond this month.
This is the fifth in a series of posts featuring my analysis of individual large-cap Dow component stocks. Expect another within a few days.