Zoetis Stock Getting Ahead Of Itself Invites Correction
EWM Interactive | Jan 14, 2021 06:04AM ET
Based in Parsippany, NJ, Zoetis Inc (NYSE:ZTS). is an animal medicine and vaccine developer and manufacturer. The company went public in 2013 and has been enjoying steady growth since. With the stock currently above $160 a share, Zoetis holds a market cap of nearly $80 billion.
For a Elliott Wave chart below suggests the tide might be about to go out soon.
The surge from $28.14 in April, 2014, to $176.64 in November, 2020, can be seen as a textbook five-wave impulse . The pattern, which saw Zoetis rallying 528% in six and a half years, is labeled (1)-(2)-(3)-(4)-(5). The five sub-waves of wave (3) are also visible and labeled 1-2-3-4-5. Wave (4) coincided with the coronavirus selloff in March, 2020.
h2 Zoetis is a Great Investment… at Half Its Current Price/h2Investors could hardly make a mistake buying Zoetis in the years after its IPO. Unfortunately for the bulls, no trend lasts forever. According to the theory, a three-wave correction follows every impulse. The negative phase of the Elliott Wave cycle usually reaches the termination area of the fourth wave.
In Zoetis’ case, this means a decline to the divergence between waves (3) and (5). If this analysis is correct, we can expect a 40% to 50% correction over the next couple of years. Given the quality of the company, it should be viewed as a buying opportunity.
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