From Elliott wave perspective, UNIPER is in risk of fatal economic collapse in fear of a new Lehman Brothers.
Uniper is a German energy company that initially belonged to the E.ON company and in January 2016 was consolidated each other after being listed on the Frankfurt Stock Exchange. In January 2018 the offer bid from the Finnish Fortum, a big power company was accepted by E.ON with the acquisition of the remaining 47% stake reaching $8 billion. Thereinafter, Fortum had a stake of 86% in Uniper.
But unfortunately, after the pressure of the reduced supply of Russian natural gas to production units and households through the Nord Stream 1- many of which confront the likelihood of shutting down due to the increased energy costs – the European energy market is going to outbreak the ‘’bubble’’ that has been created with the irrational correlation of electricity prices with gas prices on the Amsterdam Energy Exchange.
According to many energy market analysts, governments are trying as soon as possible to comply with an even more severe shock to the flow of natural gas and other derived energy products, nationalizing many energy companies like Uniper, financing $15 billion for acquiring the 30% stake from Fortum. They are afraid of a market collapse and a domino similar to the one of Lehman Brothers in the financial world industry in 2008.
Uniper is traded now at $3.85, having lost 90.93% from its all-time highs at $42.45 within 9 months. The all-time low was at $9.80 in September 2016.
Observing the weekly trading timeframe, we can be sure about the impulse that has formed through our counting. The reason is that, on the left side, the Fibonacci extension scale tells us that the hypothetical (3) Intermediate is shorter than the (5) Intermediate of the ((1)) Primary wave since the (5) has been completed at $42.45 and not at the 1:1 relationship with the (3) Intermediate at $41,594. Hence, it cannot be an alternative count, replacing for instance the ((1)) Primary to the (3) Intermediate wave, because according to the Elliot Wave Principle’s rules, the third of the third wave is extremely strong. So, we reject this alternative and proceed to our basic scenario.
Having broken the $9.80 price, the stock constructed a 3-sequence mode pattern as of a zig-zag (A) – (B) – (C) Intermediate waves. Cause of not being able to fall under $0 (Fibonacci extension scale on the right side), the stock – after the Government’s bailout – should rally at least to the important support level that broke ($9.80), otherwise, the rumors of bankruptcies will take place widely in the EU.
On the daily trading chart, we see the (A) Intermediate sharper than the (C) of the same degree wave. The (B) was a contracting triangle in which the bottom trendline hasn’t been retested going deeper for its last (C) being unfolded into a 5 -wave count. There are many possibilities for the stock to go further down to form the last 5 Minor of the (C) Intermediate of the ((2)) Primary wave. Thus, stay aside and be aware of the news which in turn will give the pulse for the stock to react or not.
By Stavros Chanidis
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