Deutsche Lufthansa AG (XETRA:LHAG, OTC:DLAKY) stock lost almost three euro per share since the 15.50 top it reached in the end of January 2015. We will get a rather negative outlook, if we examine only the last couple of months.
Fortunately, charts give us the opportunity to look at earlier price action. In Lufthansa’s case, it is interesting to see how prices have been moving since October 2014.
As visible, there is a very clear five-wave sequence between October 2014 and January 2015. Naturally, just as the Elliott Wave Principle postulates, it is followed by a three-wave correction in the opposite direction. According to the theory, Lufthansa stock should resume the uptrend, once the retracement is over.
As the chart shows, the price is approaching the 61.8% Fibonacci level. It is the area, where corrections often terminate, so we would love to see a bullish reversal there. Even if we do not, the count remains valid as long as the invalidation level at 10.67 is untouched.