Adobe (ADBE): Earnings Report to Trigger Major Move?

12 Jun

With Adobe's earnings report due tomorrow, we have analyzed the weekly chart to get a clearer picture. We started our count in November 2018, identifying the sub-waves 1 and 2 leading up to the primary Wave (1). This Wave (1), like the preceding sub-waves, experienced a very rapid sell-off. Such quick declines are unusual for Wave 2s, but in this chart, it repeats frequently, confirming our interpretation despite being atypical.

We have now identified the sub-wave 1 of the overarching Wave (3). This range and its midpoint have been well respected, and we are currently at the midpoint.

Two scenarios could unfold:

• Negative Earnings Report: If the earnings report disappoints, the price could fall into the Weekly Order Block Cluster around the 78.6% Fibonacci retracement level, approximately $350. This would likely result in a significant pullback within the range.

• Positive Earnings Report: If the earnings report is strong, the price could shoot up, creating a breakout gap. After this initial surge, we might see a retrace back towards the midpoint of the range before continuing upwards to potentially make a new high above $700.

Given the uncertainty, we are not placing any entries at this time. We will wait to see how the earnings report affects the price action and then consider potential positions based on the developments.