The first time we wrote about CVR Energy was in September 2016. CVI stock was hovering below $15 a share at the time, following a crash from as high as $72 in 2013. Despite the terrible three years the bulls had to suffer through, our Elliott Wave analysis of CVI stock ‘s weekly chart convinced us this was a buying opportunity in disguise.
The reason for our optimism was the stock price path during the preceding eight years. There was a complete 5-3 wave cycle pointing north, labeled (1)-(2)-(3)-(4)-(5)-(a)-(b)-(c). The Elliott Wave theory postulates that the larger trend should be expected to resume in the direction of the five-wave sequence.
By July 2018, the share price was searching for direction near $37.50 already. It was time to take another look at the charts and the one below obliged.
A year ago, CVI stock was up almost 300% from the bottom in late-2016. More importantly, the recovery from $12 to $47.70 was a textbook five-wave impulse, labeled 1-2-3-4-5 in wave (1).
According to the theory, a three-wave correction follows every impulse. Hence, we though wave (2) was going to drag CVI stock to the support area of wave 4 near $25-$30 before the uptrend resumes in wave (3).
No Top in Sight for CVI Stock
The updated chart below shows what has been going on with CVR Energy stock in the last year.
Wave (2) terminated at $30.46 on December 24th, 2018 and made way for wave (3) up. CVI stock reached an intraday high of $50.41 before closing a cent below $50 a share on Friday. Judging from the updated chart above, wave (3) to the north is well underway.
CVR Energy may be up 48% in 2019 and 316% since October 2016, but the bull party seems far from over. A new all-time high beyond $72 is on the cards for CVI stock in the long-term as the company’s financial results improve and wave (3) up progresses.