Advanced Technical Analysis - WEN
Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.
Wendy's (WEN:NYSE) has completed a clean and well proportioned impulse (5 wave) move down from its all time peak in March 2004 at $42.75 to the recent low on June 30th at $33.94. Though there may be some debate about just what degree of trend change has taken place at the March all-time peak, because of this 4 month 20% 5 wave decline, there can be no debate based on the analysis that WEN appears poised for much lower prices once this initial 5 wave down from March has been balanced by a wave B or wave 2 bounce. Specifically, WEN is in a wave B or wave 2 bounce from the June 30th $33.94 low that could take prices into stiff Fibonacci resistance in the $37.30-$39.40 area before this wave B/2 zig zag bounce completes. At that stage a move lower from resistance to at least $30, but more likely $24-26 area could occur before we could expect another bounce of meaningful size.
In our educational opinion, we could expect a bounce to 37-39, after waiting for the minor correction of the 6/30 - 7/19 move to potentially bottom in the next several sessions in the $34-35 area. The analysis suggests that we could expect that bounce to occur at that point, unless prices continue to decline through $33.80. As the upward bounce continues in the next several weeks, we will have a tighter target for the expected wave B/2 peak.
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