Related Topics
Stocks , Investing
     

Yes, Elliott Waves Work with Individual Stocks – Here’s How

“The primary value of the Wave Principle is that it provides a context for market analysis”

by Bob Stokes
Updated: October 04, 2022

Elliott waves reflect the repetitive patterns of mass psychology -- so they are ideally suited for analyzing the widely traded main stock indexes.

On the other hand, thinly traded individual stocks may not trace out Elliott wave price patterns nearly as well.

That said, there are many individual stocks which are widely traded -- like most of the big and well-known companies (and others which have captured the interest of investors).

Consider the stock of the largest bank in the U.S. Back in March, our Global Market Perspective showed this chart and said:

BankingTops

This chart shows the five-wave pattern of JPMorgan Chase's rise from March 2009 to September 2021.

Of course, the completion of a five-wave up pattern means a downtrend is next. When that analysis published, the share price was $134.40. As of this intraday writing on Oct.3, it's $106.79.

Let's go back in time to review another example of how Elliott wave analysis can be applied to an individual stock.

This case-in-point involves GE. The September Elliott Wave Theorist was discussing wave analysis with individual stocks and showed these side-by-side charts and said:

GEStock

The October 27, 2000 [Global Market Perspective] published the chart on the left, showing a completed Elliott wave in GE stock. This quarter-century pattern portended a major reversal. The chart on the right shows what happened thereafter.

Not every forecast based on the Elliott wave model works out perfectly. At the same time, keep in mind these words from Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior:

The primary value of the Wave Principle is that it provides a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market's general position and outlook. At times, its accuracy in identifying, and even anticipating changes in direction is almost unbelievable.

Here's what you need to know: Our Global Market Perspective offers you analysis and forecasts for an array of individual stocks, as well as major global stock indexes.

You also get insights into cryptocurrencies, forex, bonds, gold, silver, energy and much more.

Check out our just-published October Global Market Perspective by following the link below.

Elliott Waves Help You to Anticipate Trend Turns

Anyone can spot the current trend in a financial market.

Indeed, most investors assume that today's trend will carry into tomorrow. That's why they're caught off guard when the trend turns.

How do you avoid extrapolating the current trend into the future? Identifying the Elliott wave count helps avoid that error.

The Wave Principle's basic pattern includes five waves in the direction of the larger trend, followed by three corrective waves.

Thus, when a trend has unfolded in fives waves, you know to prepare for a turn.

Learn about the key global financial markets that appear on the cusp of major trend changes.

Follow the link below to read our just-published October Global Market Perspective.

Bitcoin: How the “Fear of Missing Out” Still Lingers

Even after a big decline in Bitcoin, a bullish conviction about the cryptocurrency remains -- at least in some quarters. Elliott wave analysis can put Bitcoin's price action into context.

EXCLUSIVE

Fear & Greed: What Really Caused the Crypto Collapse

From November 5-10, some of crypto's heavy hitters dropped significantly. FTX takes the brunt of the blame, but a quick glance at these charts will show you how Elliott waves were ready for the drop. Plus, you'll learn what our expert analysts are looking for next in cryptos.

The Crazy Volatility in Cocoa Has Us Giving Thanks for Elliott Wave Analysis

At the start of November, cocoa prices came out of the gate in rally mode, soaring to six-month highs on November 10. But since then, the sweet soft has soured to multi-week lows. Turns out our Elliott wave analysis caught the moves in both directions --what's more, our Elliott insights also consider where cocoa may be headed next.