Stoneco LTD ticker symbol: STNE is a provider of financial technology solutions that Warren Buffet recently inducted in Berkshire Hathway’s (NYSE: BRK-A)(NYSE: BRK-B) holdings. The company went public in October 2018 with an initial IPO price of $24 per share. The stock, Since than rallied 110% & now soaring 55% since this year’s peak seen at 4/02/2019 ($45.62) with current price floating at $28.51.
The recent plunge appears to be triggered by a move from a rival company ITAU UNIBANCO SA (NYSE: ITUB) a large Brazilian bank, said that it will begin to advance credit card payments to small and medium-sized merchants. Itau’s card-processing unit will pay merchants in just two days, which is much faster than the 30-day industry standard. This could certainly put pressure on other payment processors in the Brazilian market, including StoneCo. And after today’s drop, it’s still up by more than 45% year to date, so it’s not surprising that potentially negative news is producing a big pullback.
Technical Side
Now let’s take a look at the technical side of the market, in which we will going to analyze the recent Decline from 4/02/2019 peak ($45.62). The cycle from October 2018 IPO lows ended Super Cycle degree wave (w) as zigzag structure. Down from there, Super Cycle degree wave (x) remain in progress as zigzag structure & has managed to reach 100%-161.8% Fibonacci extension blue box area of cycle degree wave a-b at $28.58-$22.12 area. And soon buyers are expected to appear in this blue box area looking for another extension higher or should produce a big 3 wave bounce at least.
STNE Elliott Wave Analysis
Alternatively, the above-mentioned area could end just wave “w” which would result in 3 waves bounce to correct the decline from the peak before making another 3 swings lower. Break below 161.8 Fibonacci extension at $22.12 would suggest a decline from the peak would turn into 5 waves and break below $22.12 should still be wave 3 from the peak.
STNE Alternate Elliott Wave Analysis
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