We’ve been tracking SEI Investments Company (NASDAQ:SEIC) for quite a while as it tends to draw very clear Elliott Wave patterns. First, the charts helped us predict the crash in March 2020, four months in advance. Then, in the midst of the Covid-19 panic, Elliott Wave analysis positioned us for the subsequent recovery.
Later, in June, 2021, with the stock up 80% already, we thought it was poised to go much higher still. That is not exactly what happened, though. Instead, SEIC stock is actually down by some 14% since we last wrote about it. Does this mean the anticipated recovery has been cancelled? According to the updated chart below, it has only been postponed.
The weekly chart above shows the same five-wave impulse we first identified back in November, 2019. It is labeled (1)-(2)-(3)-(4)-(5) and was followed by a textbook (a)-(b)-(c) zigzag correction. According to the Elliott Wave theory, the bullish cycle is complete and the uptrend has now resumed. Its initial targets lie above the top of wave (5), putting $80 within the bulls’ reach.
SEIC Stock Bulls Staging a Comeback
The reason for the delay, however, is that the recovery from $35.40 to $65.22 is a leading diagonal. The pattern is choppy and overlapping, and was followed by a pullback in wave (2) that was even more so. Nevertheless, the positive outlook remains intact. The support area near $50 a share seems to have put the brakes on wave (2). If this count is correct, SEIC stock is now likely to head north again in wave (3). Long-term targets near $80 are still plausible once the price breaches the (5)-(b) resistance line, this time more decisively.
Besides, SEI Investments is a very high-quality company, which also happens to be undervalued, giving us yet more reasons for optimism.