Swissquote Group Holding (SIX:SQN) operates a leading trading platform primarily in Switzerland, but also in greater Europe and worldwide. With 2021 revenue of over CHF 470 million, it is a serious presence in the industry.
In fact, Swissquote stock has done better than many of its rivals’ since the 2018 regulatory crackdown on CFD trading. SQN bottomed out at CHF 34.25 in the Spring of 2019 when the entire sector was in the doldrums.
By November, 2021, however, the stock was hovering above CHF 210 a share. Thursday's close at CHF 170 means investors, who were lucky or smart enough to realize the 2018 regulation will not kill the industry, and to buy near CHF 40, are still up four-fold.
Swissquote, however, is not a buy-and-forget stock. Retail trading is a cyclical business which ebbs and flows with the economic cycle. For instance, it took ten painful years for SQN to even begin to recover from the 2008 crash.
So, while the recent past saw tremendous growth, it is dangerous to blindly extrapolate it into the distant future. Can the bulls feel safe?
Is Another Elliott Wave Winter Coming For Swissquote Stock?
Elliott Wave analysis has helped us predict sudden bearish reversals in Etsy (NASDAQ:ETSY), Roku (NASDAQ:ROKU) and Match Group, (NASDAQ:MTCH) among others.
Let’s see what it can tell us about Swissquote's prospects.
It looks like Swissquote stock is on the verge of completing a textbook five-wave impulse. The uptrend that started in early 2017 has already produced waves (1), (2), (3) and (4).
It is interesting to notice that three lower degrees of the trend are visible within wave (3). If this count is correct, the recent sharp drop from CHF 212.50 to CHF 128 must be wave (4). This means we can expect one last push in wave (5) before the pattern is over.
A new, all-time high near CHF 230 makes sense before the bears return for the corresponding correction which follows every impulse. So it seems the bulls are safe for now.
Instead of celebrating the new record, however, investors should brace for a notable decline back to the support of wave (4). Let’s just hope that it doesn’t last for ten years this time.