In case you didn’t know, GN Store Nord A/S (OTC:GNNDY) is a leading hearing aid devices manufacturer, based in Denmark. The company’s annual sales are expected to exceed DKK 15 billion (US$2.33 billion) this year. According to Statista, GN held a 15% share of the global hearing aid device market in 2019. Considering that its growth rate has been higher than that of its sector, that market share has certainly grown since.
However, GN Store Nord stock is down 27% in the past three months since July. Given the company’s prospects and high quality, it is understandable that most investors see this dip as a buying opportunity. Alas, we would happily agree if it wasn’t the Elliott Wave chart below.
GN Store Nord ‘s weekly chart shows that the powerful uptrend from the 2008 bottom has evolved into a complete five-wave impulse. The pattern is labeled I-II-III-IV-V, where wave IV is an expanding flat correction. If that is correct, the sharp surge from the depths of last year’s coronavirus panic must be wave V.
GN Store Nord Can Shed Another 40% Before It Is A Bargain
The theory states that a three-wave correction follows every impulse. This means the current weakness is likely far from over as corrections usually erase the entire fifth wave. The drop to DKK 399 (US$62) a share is simply too shallow to be the end of it.
We believe the support around DKK 400 (US$62) can slow the bears down. Eventually though, they should be able to drag the stock price to the termination area of wave IV near DKK 250 (US$39). From the current level of DKK 425 (US$66), that is roughly 40% to the downside. Once there, GN Store Nord stock would definitely be in the bargain bin.