S&P Global Can Disappoint In Next Couple Of Years
EWM Interactive | Feb 10, 2021 05:57AM ET
In July last year, we wrote an Elliott Wave analysis highlighting the possibility of a notable 40%+ correction in Moody’s stock. Seven months later now, the share price is little changed and the negative outlook remains valid. Today, we are going to examine Moody's (NYSE:MCO) major rival–S&P Global Inc (NYSE:SPGI).
S&P Global is a ratings agency, benchmarks and data provider with an incredibly sound business model and a $78B market cap. The company is in the process of acquiring IHS Markit (NYSE:INFO) for roughly $44B, but that is another matter. What worries us is that SPGI’s weekly chart shows a pattern very similar to the one we found in Moody's last year. Take a look.
Starting from the mid-1990s, S&P Global seems to have drawn a complete f ive-wave impulse. The pattern is labeled I-II-III-IV-V, where wave II occurred during the 2008 Financial Crisis. Wave III was a real delight to anyone smart or lucky enough to ride most of it. Its five sub-waves are also visible and marked 1-2-3-4-5.
h2 Moody’s and S&P Global to Fall in Tandem/h2The coronavirus selloff in March 2020 put wave IV into place and sat the stage for a new high in wave V. The fact that wave IV ended shortly after touching the 38.2% Fibonacci level supports the idea that the following surge is a fifth wave.
According to the theory, a three-wave correction follows every impulse. If the count above is correct, we can expect a major decline in S&P Global stock to erase the entire wave V. A drop to the support area of wave IV near $200–$170 makes sense. It would be an excellent opportunity to invest in this growing, profitable, wide-moat business.
Original Post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.