Trinseo (formerly Styron) is a global materials company based in Berwyn, Pennsylvania, USA. The stock being a component of the Russel2000 index can be traded under ticker $TSE at NYSE. Trinseo offers a broad line of plastics, latex and synthetic rubber. The primary markets are automotive, appliances, electronics, packaging, tire industries, among others. In long perspective, we can see commodities like oil, rubber, cotton turning higher. However, last 18 month, strength in US dollar has created a pullback in those values. Soon, a new cycle in commodities to the upside is expected. Therefore, Trinseo being an important player in the manufacturing of synthetic materials should be a great opportunity for investors to diversify their portfolio by indirect investement in the rising commodity prices.
In the initial article from May 2021, we have forecasted the end of the correction in 3 swings and a new cycle up. As a matter of fact, the 54.20-44.25 area has provided a 3 waves bounce. Now, we see 7 swings lower in progress. Therefore, another opportunity arises to enter the market. In this blog, we provide an update.
Trinseo Weekly Elliott Wave Analysis 08.07.2022
The Weekly chart below shows the Trinseo shares $TSE traded at NYSE. First, the stock price has developed an impulse higher in red wave I of a cycle degree. It has printed the all-time highs on the 29th of January 2018 at 85.35. From the highs, a correction lower in red wave II has unfolded as an Elliott wave zigzag pattern with a truncated ((C)) wave. Frequently, lack of space to the downside makes many stocks truncate in the last swing without reaching the usual extension of 100%. Trinseo has printed an important bottom on the March 12th 2020 at 14.16. As a matter of fact, the stock price has lost 83% of its value within 25 months.
From 2020 lows, a new cycle in wave III has already started and should extend towards 85.35 highs and beyond. Then, the target for wave III will be towards 99.26-151.82 area and even higher.
Double Three Correction
In shorter cycles, from March 2020 lows a cycle higher in black wave ((1)) has ended on 18th of March 2021 at 76.49. From the highs, a correction lower in black wave ((2)) is still in progress and should correct the March 2020 cycle before Trinseo will resume the rally. Hereby, the wave ((2)) develops as a double three correction. First 3 swings of wave (W) have reached the intermediaray 54.20-44.25 area. As a matter of fact, buyers from there have seen 3 waves bounce which has failed to reach into the new highs. Therefore, connector wave (X) has been formed. From the 61.63 highs, another leg lower has started. It has broken the 44.20 lows opening up a bearish sequence. Now, more downside within wave ((Y)) should take place. Investors and traders can be looking to buy pullback in 7 swings from 29.39-14.16 area.
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