Teva Pharmaceutical(NYSE:TEVA) advances in an incomplete impulsive upward sequence visiting the previous highs of early March.
The TEVA’s Elliott wave short-term picture reveals a bullish structure that began in mid-April at $6.25 per share, which reacted after a downward sequence that started on February 12th, when the pharmaceutical company reached the yearly high at $12.76 per share.
TEVA, in its 2-hour chart, exposes the price action soars in an incomplete upward sequence, which looks running in a third extended wave. According to the textbook, the extended wave is a structural series that characterizes by to be the most extended movement of the impulsive sequence. At the same time, the Elliott wave theory says that there can be only one extended wave in an impulsive structural series, and the other two motive waves will be similar in terms of price, time, or both.
Until now, the Israeli pharmaceutical company advances in its third wave of Minuette degree identified in blue, which at the same time, runs in its fifth wave of Subminuette degree labeled in green. On the other hand, the ascending trendline that connects the end of waves ii and iv in green leads us to observe that the short-term trend remains on the bullish side. In this context, the breakdown of this trendline will carry us to determine that the third extended wave ended, and TEVA started a corrective sequence that should correspond to wave (iv) in blue.
Considering the alternation principle from the Elliott wave theory, and regarding that, the wave (ii) is a simple corrective formation, we expect that wave (iv) will be a complex formation, and its duration takes a longer time than the second wave.
Our short-term outlook for TEVA foresees a sideways movement corresponding to wave (iv), which should carry the price toward a new high corresponding to an upward wave (v) in blue. In the mid-term, the retracement of this impulsive structure could bring us the possibility of incorporating us into a new bullish sequence of the same degree.