$CON: Automotive Giant Continental provides a buying opportunity

Continental is a German multinational automotive parts manufacturing company. It is specializing in brake systems, interior electronics, tachographs, automotive safety, powertrain and chassis components, tires and other parts for the automotive and transportation industries. Founded in 1871 and headquartered in Hanover, Germany, Continental is a part of DAX40 index. From the all-time lows, the stock price is showing a series of nests. It is expected to accelerate higher towards the new all-time highs. In the initial article one year ago, we have forecasted the acceleration higher to happen. We were right. Now, a pullback provides an opportunity for even more upside.

Continental Monthly Elliott Wave Analysis 01.31.2022

The monthly chart below shows the Coninental stock $CON traded at XETRA. From the all-time lows, Continental has developed a cycle higher in black wave ((I)) of a grand super cycle degree. It has printed the the all-time highs on January 2018 at 228.89. Hereby, within the impulsive advance, all the subwaves (I), (III) and (V) are impulsive waves, too. Wave (III) demonstrates a clear extension in price.

From the January 2018 highs, a sharp correction in wave ((II)) has retraced more than 78.6% of the rise. It has unfolded as an Elliott wave zigzag pattern being 5-3-5 structure. Hereby, it has bottomed in March 2020 at 45.75. From there, the wave ((III)) might be in first stages and should break to the new all-time highs. The target higher for the wave ((III)) is the 1.0-1.618 extension of the wave ((I)) being 273.94-415.15 area and even higher.

Continental Daily Elliott Wave Analysis 01.31.2022

The daily chart below shows the initial nest consisting of waves I and II. First, from the March 2020 lows at 45.75, a cycle higher in red wave I has unfolded as an impulse. It has printed its top in June 2021 at 117.99. Now, a correction lower in red wave II might be still in progress. While price is trading below 111.96 peak, $CON can still extend deeper into 83.75-66.22 area. There, based on our expectations, a reaction higher in the wave III should take place. While above 82.36, wave III might be already in progress. In that case, the target will be towards 1.0-1.618 extensin of the wave I being 154.73-199.46 area and even beyond.

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