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Adobe - Still to Fall or Has It Reached Support Area?

NASDAQ:ADBE   Adobe Inc
Is one of the leading digital media companies Adobe already attractive for investors?
Let's look at fundamentals and technical aspects.

Fundamental indicators:
  • Revenue and Profits - demonstrated consistent and explosive long-term earnings growth over the past 10 years
  • Profit margin - impressive 40% in 2021
  • P/E - still overpriced with 37x ratio
  • Liabilities - no problems with debt

Technical Analysis ( Elliott Waves ):
  • The sharp drop in March 2020 has completed a Running Flat correction that lasted for more than year and a half
  • Since then Adobe has enjoyed over 170% gain in its share price with a clear impulse movement
  • Having peaked at nearly $700 in November 2021 it has completed global wave 3 that started in August 2011 - very lengthy growth cycle
  • And hence it is time for even longer correction than the one we observed in 2018-2020, the duration target is end of 2023
  • Global wave 4 has already started with rapid correction from the historic high, the potential support levels using Fibonacci retracement are 0.5x and 0.618x, $360 and $280 respectively. But given still quite high P/E ratio it is more likely for Adobe to reach lower level of this zone
  • Once support is found then we are likely to observe a very lengthy corrective movement in the range between the lower support level and the maximum price of $700, which will provide short term opportunities for bull and bears

What do you think about this scenario for Adobe ?

Please share your thoughts in the comments and like this idea if you would like to see more stocks analysed using Elliott Waves .

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