We last wrote about Danish jewelry-maker Pandora on June 8th, saying that it had just completed its Elliott Wave correction and was poised to head higher again. The stock was trading at DKK 550 at the time, after a slump from DKK 680, but initial bullish targets suggested it was supposed to climb back to that level. Judging by that 19% drop, investors weren’t feeling particularly optimistic about the company. The chart we looked at then, however, strongly implied that they should’ve. Take a look at it below.

Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to recognize them yourself!

More than two months ago, Pandora was on the verge of completing a simple (a)-(b)-(c) zigzag correction. Wave (a) was a leading diagonal, followed by an a-b-c-d-e triangle in wave (b) and a five-wave impulse in wave (c). According to the theory, once a correction is over, the preceding trend resumes. Here, the trend prior to this retracement was bullish, so it made sense to expect more strength. Not to mention that there was a strong bullish RSI divergence between waves 3 and 5 of (c).

From a fundamental perspective, the company’s high profit margins, little debt and low valuation made it look like a safe bet, as well. And Pandora really did deliver on the business front in Q2. Earlier today, it posted better-than expected sales and raised its guidance for the full year 2023. The market reacted by pushing the stock to DKK 698 so far, up 27.2% since our early-June analysis.

The question is, should investors be joining the bulls now, or is it time for this rally to take a break? Pandora ‘s stellar Q2 report leans firmly on the former. The updated chart below, however, suggests a short-term pullback is more likely, before the uptrend can resume. Take a look below.

The updated 1h chart shows that today’s jump probably marks the end of the recent recovery. It is marked as wave 5 within a five-wave impulse labeled 1-2-3-4-5. The five sub-waves of wave 3 are also visible, while wave 4 is a triangle correction. Here again, there is an RSI divergence, but this time it is a bearish one between waves 3 and 5 of (1). While we remain long-term bullish on Pandora, this count suggests that a pullback in wave (2) to the support near DKK 630 can be anticipated.

In our Elliott Wave PRO subscriptions we provide analyses of Bitcoin, Gold, Crude Oil, EURUSD, USDCAD, USDJPY and the S&P 500 every Sunday and Wednesday! Check them out now!

Disclaimer: The author is long Pandora A/S in The EWM Interactive Stock Portfolio.

The post A Look at Pandora After Its Beat-and-Raise Q2 Report appeared first on EWM Interactive.