Really long-term Humana (NYSE:HUM) investors have little to complain about. At $256 per share today, the stock is up by over 5000% since it bottomed below $5 in mid-2000. Alas, in today’s world of rapidly shrinking attention spans and holding periods, there is hardly anyone, except maybe Warren Buffett, who actually holds a stock for a quarter of a century.
So what most Humana investors actually care about is the fact that the stock is down 55% since November 2022. Adding insult to injury, Humana started falling just when the general stock market began its ascent to new records. The main reasons for the slump were higher-than-anticipated costs and а star ratings reduction in its Medicare Advantage business.
Apparently, investors paying north of $500 in late 2022 were oblivious to these risks. Now that the crash has greatly de-risked the stock, Humana has been left for dead. The question is, can we expect a recovery soon? The Elliott Wave chart below seems to suggest so.
It reveals that the past 25 years have produced an almost complete Elliott Wave cycle. Its motive phase is a five-wave impulse, marked I-II-III-IV-V, where the five sub-waves of III are also visible. This pattern has been followed by a corrective phase, which looks like an A-B-C expanding flat. Wave A, which we managed to predict two months in advance, took place during the COVID-19 panic of March 2020. Wave B was a huge (a)-(b)-(c) zigzag up to $571. And if this count is correct, wave C should evolve into a five-wave impulse.
Waves (1)-through-(4) seem to be in place already and the impulsive structure of wave (3) is also on display. Wave (4) looks like a triangle pattern, preceding the final wave of the sequence in wave (5), which has yet to develop. Once the corrective phase of the cycle is complete, the preceding uptrend should resume. This means that instead of throwing in the towel, Humana bulls should see the anticipated drop below $200 as a buying opportunity.