$SPOT Elliott Wave Update Aug 2, 2024
$SPOT Elliott wave Update Aug 2, 2024
### $SPOT Elliott Wave Update — August 2, 2024
Spotify Technology S.A. ($SPOT) recently saw a dramatic surge following its earnings report, skyrocketing to $360 before experiencing a significant pullback. This update analyzes Spotify’s price movements using Elliott Wave theory to understand its current correction phase and potential future targets.
#### Wave 3 Rally
The Wave 3 rally in $SPOT was impressive, propelling the stock from $130 to a peak of $360. This strong upward movement was driven by a combination of positive earnings, market sentiment, and overall bullish momentum in the tech sector. Wave 3 is often the longest and most powerful wave in the Elliott Wave cycle, characterized by a strong trend supported by fundamental growth and investor enthusiasm.
#### Current Wave 4 Correction
After peaking at $360, $SPOT has entered a Wave 4 corrective phase. Corrections in Wave 4 typically retrace a portion of the gains made in Wave 3, allowing the market to consolidate before potentially resuming its upward trend in Wave 5. Wave 4 corrections are often complex and can take various forms, but a common retracement level is around 38.2% of the Wave 3 advance.
For $SPOT, a standard 38.2% retracement of the Wave 3 move from $130 to $360 suggests a potential support zone between $285 and $290. This range represents a significant pullback but remains within the bounds of a typical Elliott Wave correction.
#### Key Support Levels
As $SPOT approaches the $285–$290 support zone, investors should closely monitor the stock for signs of a reversal. This level is crucial because it aligns with the .382 Fibonacci retracement level, a common target for Wave 4 corrections. A successful hold at this support could indicate the end of the correction and the beginning of a new upward Wave 5.
However, if $SPOT fails to find support at this level, the correction could deepen, leading to further declines. It’s essential to watch for any fundamental developments or shifts in market sentiment that could influence the stock’s movement.
#### Market Context
$SPOT remains one of the “last men standing” in its sector, maintaining relatively strong performance compared to its peers. This resilience makes it a potential target for further downward pressure as traders look to take profits or hedge against broader market volatility. Given the overall market conditions and the potential for heightened volatility, $SPOT may experience additional selling pressure in the near term.
#### Conclusion
Spotify’s recent price action following its earnings report has set the stage for a critical Wave 4 correction. With Wave 3 propelling the stock from $130 to $360, the current retracement toward the $285–$290 support zone will be pivotal. Investors should watch this area closely for signs of a reversal, which could signal the end of the correction and the start of Wave 5.
In the coming week, $SPOT may face increased volatility, particularly if broader market conditions remain uncertain. Nonetheless, the stock’s overall resilience and fundamental strength suggest that any pullback to the $285–$290 range could present a compelling buying opportunity for long-term investors. As always, it’s crucial to stay informed and consider both technical and fundamental factors when making investment decisions.
