My Watchlist [75]: WBA... Headed to 29.85?
*TA as of 11/3/24
Hi everyone, today I’ll be updating my TA for a pharmacy store chain:
Walgreens Boots Alliance, Inc. (NASDAQ: WBA)
*I last charted WBA a long time ago. Consider this newsletter the latest forecast on WBA’s price action in the coming months.
WBA is trading in a large falling wedge pattern, forming lower highs and (marginally lower) lows over the past 20 years. The most notable sign of reversal has appeared with the formation of a bullish divergence on the monthly chart. Moreover, the stock has corrected more than 78.6% from highs.
On the weekly chart, I noticed a possible ascending broadening wedge expansion pattern forming at lows. Weekly also hit 22.70 in September 2023, which has been a reliable reversal level since 1968.
On the daily chart, we can see the expansion pattern in greater detail. Notice how the reversal was marked by bullish divergence, and subsequently a break out of the falling wedge consolidation pattern. We are seeing a similar pattern on the stock currently. I can see a retest of 28.26 and subsequently 29.85 to fill the daily imbalances at both levels.
In the longer-term, I am expecting WBA to retest 36.14 (weekly imbalance) and find confluence with the long-term resistance trendline. However, it is worth noting that until we break out of the larger consolidation structure (purple trendlines), we face the risk forming a lower high and heading lower. A breakdown from this pattern will most likely see new lows at 19.38 and lower. Nevertheless, there is still some upside to be had from here provided the structure holds.
Fundamentals wise, the company is undergoing extensive restructuring, having just brought in an experienced CEO, Tim Wentworth, who used to work for Cigna, one of WBA’s competitors. I liken WBA to INTC - the stock price initially plummeted on Pat Geisinger’s appointment in 2021. This is because the company needed time to consolidate their operations and restructure. However, over time, the company’s financial position improved and the stock price followed as a result. WBA is likely to follow this route, and patient investors will most likely be rewarded.
Sentiment: BUY
Summary (with Price Targets - NFA):
Long-term falling wedge consolidation pattern with monthly bullish divergence and a near-term ascending broadening wedge expansion pattern. Measured move should be towards 29.85 in the short-term (several months) and 36.14 in the long-term. Upon break out, the stock can eventually return to pre-COVID highs with a sufficient time horizon. A breakdown will see new lows at 19.38 and lower.
Investors can accumulate at current levels down to 19.38. If we form new lows below this then you can reconsider your position.
A restructuring play similar to INTC - while the stock price has been falling since Wentworth’s appointment (similar to Geisinger), it should be beneficial to the company in the longer term as the company consolidates its operations and realises cost efficiencies.
Alright, that’s all for this newsletter. Till next time!
@TigerStars @TigerWire @TigerEvents @CaptainTiger @MillionaireTiger
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There's a lot of analysis theories and methods in the stock market, people trying to estimate the trend by studying the pattern of the stock price, and some experts are doing it well.
But as a nobody, I found it's difficult to me. So, besides of hear what people say, I will refer to a few indexes as well, because it's some collections of the reacting to the changes in the market, "let the figures tell the story", at least it's easier for me.