Warner Bros. Discovery (NASDAQ: WBD) appears to have completed a significant long-term corrective cycle and is now showing signs of a new bullish trend. The monthly Elliott Wave chart suggests the stock finished a large 3 wave flat correction at the 2024 low near 6.64 in wave II, which now serves as the key invalidation level for the bullish outlook. Following that low, buyers stepped in aggressively and triggered a strong recovery. The reaction from this area supports the view that a major bottom is already in place and that a new impulsive cycle has begun.
From the 2024 low, WBD has started to build a five-wave advance. The initial rally appears to have completed wave (1), followed by a corrective wave (2). The stock is now expected to continue higher in wave (3), which is typically the strongest and most dynamic phase of an Elliott Wave sequence. The projected path on the chart shows a continued advance in wave (3), followed by a pullback in wave (4), and then another rally in wave (5). Together, these waves should complete a larger degree wave ((1)) and confirm that a long-term bullish cycle is underway.
WBD Elliott Wave Forecast
The current structure suggests that the recent recovery is more than a temporary bounce. Instead, it appears to be the beginning of a larger bullish cycle from the wave II low completed in 2024. As long as price remains above 6.64, the bullish count remains valid. The stock should continue forming higher highs and higher lows as wave (3) develops. Any corrective pullbacks in 3, 7, or 11 swings could provide opportunities to join the trend while the larger structure remains intact.
Most importantly, we expect this new bullish cycle from the wave II low to eventually break above the previous all-time high and establish new highs over the coming years. The current advance is viewed as the early stages of that larger recovery, with wave ((1)) expected to lead the stock significantly higher before the next larger correction unfolds.
Conclusion
Warner Bros. Discovery appears to have completed a major correction and started a new bullish Elliott Wave cycle from the wave II low. While price remains above 6.64, we expect further upside within wave (3), followed by wave (4) and wave (5) to complete the larger wave ((1)) structure. Ultimately, this new cycle should lead to a break above the previous all-time high and the creation of new highs in the years ahead.
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