Why Some Sectors of “Green” Investing May “Disappoint”

This ETF has “declined in a very clear five-wave pattern”

by Bob Stokes
Updated: November 04, 2021

Green fever is running high.

Dignitaries from around the world have been gathered in Glasgow, Scotland since Oct. 31 for the 26th United Nations Climate Change Conference of the Parties (COP26 for short).

The conference is planned to run through Nov. 12 and the hope among climate change activists is that global leaders will commit to the "greenification" of their economies.

In the investing world, many financial professionals have fully embraced various equity investments which are associated with green technology ventures, social justice and social inclusion.

Corporate striving toward social and environmental goals is also evidenced in what is called "ESG" debt (ESG stands for "Environmental, Social and Governance").

Here's a Financial Times headline from April:

Borrowers tap hot ESG demand to sell green bonds at a premium

This demand has persisted. Here's what Bloomberg reported on Oct. 12:

The European Union drew record demand for its debut green bond, in the sector's biggest-ever deal.

Yet, getting back to the equity side of "green" investing, Elliott Wave International's Head of Global Research, Murray Gunn, says "there may be disappointment ahead."

Here's more of his commentary from the Oct. 13 European Short Term Update, just below this chart which was updated on Nov. 1:


The chart shows the price of the iShares Global Clean Energy ETF (ICLN). From its high of 34.25 in January of this year, ICLN then declined in a very clear five-wave pattern into a low of 20.44 in May, a 40% haircut. Since May, ICLN has drifted sideways in what looks like a flat correction. The point to note is that the five-wave decline followed by a sideways movement is a big clue that the overall decline is not complete.

You can find more financial insights in the thrice weekly European Short Term Update.

Or, if you would like short-term, plus long-term, big-picture forecasts for European markets, you may elect to choose our European Financial Forecast Service.

Just follow the link below to find out more.

Get Near-Term Forecasts for European Financial Markets

You can find them inside the thrice weekly European Short-Term Update.

The editor is United Kingdom-based Murray Gunn, who also serves as Elliott Wave International's Head of Global Research.

Murray is an experienced and skilled market technician who bases his forecasts for key European financial markets on the Elliott wave model.

Besides chart analysis, Murray provides insights into economies, inflation, deflation and more.

Here's a quote from the Oct. 29 ESTU:

Britain is embracing higher prices in an attempt to reduce its debt.

Only three things, it is said, can happen to debt. It can be repaid or it can be defaulted on. The third option that economists state is that it can be inflated away. What does that mean?

Murray goes on to provide the answer.

So, if you're mainly looking for short-term coverage in the European markets, then the European Short Term Update is for you.

On the other hand, if you would prefer both short and long-term, big-picture coverage, choose the European Financial Forecast Service.

Make your selection below to get your forecasts instantly.

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