4UCB trade ideas
UCB.BR short term bullish potential to challenge ATHConclusion:
A substantial break above 100, preferably above 107 signals a short term bullish potential, challenging ATH and beyond.
A drop below 75 on the other hand renders long term bearish or at least choppy consolidation.
For short term play targeting 108 minimally, with tight stop just under 96, R:R will at least be 2:1.
If break out successful, keep trailing up stop is advised.
Regardless how this short term play works out, it’s prudent to take proper measure to maintain overall exposure before next earning report, due in Feb 2022.
Elliott Wave study v.1:
After reaching ATH at 113 in Jul 2020 and then 3 waves down to 75 in May 2021, it seems to have a short term bullish set up.
Assuming there will 5 up off that May low:
1. the 5 ups to 100 seems perfect, with circle iii of 1 hitting 0.618 and circle iv of 1 retraced to 0.5;
2. then 3 downs to 90 in Sep can easily be counted as circle a-b-c of a corrective wave 2;
3. the mini double top of 107 in Nov looks tricky with a very short circle v; as wave 3 is shorter than wave 1, wave 5 is expected to be not longer than 3;
4. the corrective wave 4 features a circle c with 5 sub waves, in typical contrast with wave 2 where the drop is sharp but shorter in time;
5. we are possibly looking at the start of the 5th, with the first sub waves circle i-ii in place.
Point of concern:
Potential H&S formation i.e. LS at 100 in Aug, H at 107 in Nov, currently right at the RS level at 100-101.
The difficulty to break out this level is also proven by three failed attempts since late Nov, will fourth time be the charm?
The volume profile suggests a strong point of control around 97-98, while the rising RSI during the consolidation in wave 4 also gives it the benefit of the doubt.
Note:
The decent balance sheet and the strong track record of this solid company is well reflected in the long run up of the share price, a better entry for long term holding might be given to those who have patience.
The mono-holding above UCB, $TUB.BR is preferred in this regard given the high discount, which offers an extra margin of safety.
Like most continental European stocks, dividend is paid yearly. Its impact is more significant then a quarterly dividend, which is common for US stocks.
Next pay-out expected in Apr-May 2022, probably around 1.30 per share, a possible trigger for more correction.
Disclosure:
Long term holder of both UCB and TUB, Newbie in Elliott Wave.
Will take out cost base if UCB cannot hold 90 and exit remaining positions if 75 breached.
Price in EUR
