Related Topics
Trading , Stocks , Investing

Regeneron Pharmaceuticals (REGN): Earnings vs. Elliott wave analysis

See which data set helped traders stay in front of REGN’s late 2017-early 2018 crash

by Nico Isaac
Updated: July 10, 2018

According to a June 26 Fortune Magazine article, New York-based bio tech company Regeneron Pharmaceuticals is one of the "100 Best Places for Millennials to Work" in the world. Shares one of Regeneron's employees:

"The thing I love about working at Regeneron is that when they say data is king, they mean it. Our work and projects are always changing based on what the data shows us."

We hear the same expression bandied about Wall Street; data is king to determining a market's price trend, with the long-reigning monarch of that data being earnings reports.

All hail earnings reports? Not so fast!

Our very own senior analyst and long-reigning Trader's Classroom instructor Jeffrey Kennedy admits to the "seductive nature" of earnings data, tempting investors into a false sense of confidence regarding future price action. But there's a danger in such logic, as Jeffrey explains:

"My own experience trading earnings reports has been hit or miss. At the very least, it's been frustrating because there have been times when the earnings report will be positive, and the stock price will decline -- or vice a versa."

You've seen this happen too, I'm sure. So, why does it happen?

Because it's not the hard data inside the earnings report that drives prices. It's how the market participants interpret that data. And their interpretation depends on the current trend in market psychology. But hold on, let's let Jeffrey explain more.

Over the course of his career as a technical market analyst and trading instructor, Jeffrey has relied on another form of data to determine the most "watch-worthy" issues: Elliott wave analysis. For Jeffrey, there are three main requirements for a high-confidence trade set-up:

  • A Clear Trend: Jeffrey explains: "The first thing I want to identify on a market's price chart is the trend." Higher highs and higher lows indicate an uptrend, whereas lower highs and lower lows suggest a downtrend at play.
  • A Recognizable Wave Pattern: Jeffrey is emphatic: "If you can't count [the Elliott wave subdivisions inside a price move], don't trade it." He sticks to the five core Elliott wave patterns: impulse wave, ending diagonal, zigzag, flat, and triangle.
  • A Clue to Price Personality: Slow and choppy price action contained within parallel lines indicates countertrend action -- i.e., a correction. Conversely, when prices move far and fast, and especially if you see a price gap on the chart, this indicates the so-called impulse waves -- i.e., the direction of the larger trend.

Now let's see how Jeffrey uses this Elliott wave data to interpret real-world price charts. One market that's fresh on the brain is Regeneron Pharmaceuticals (NASDAQ: REGN).

Our first mention of REGN comes from Jeffrey's October 19, 2017 Trader's Classroom video lesson. See why Elliott waves called for REGN to step off a sharp bearish cliff to new lows. Simply press "play" and enjoy:

Here's a close-up of Jeffrey's chart of REGN along with a recap of his overall forecast:

"The weight of evidence... would argue for a move to the downside."


The next chart shows you how closely REGN's prices followed Jeffrey's October 19 Trader's Classroom Elliott wave script: They collapsed 35% to a four-year low.

And yes – prices fell DESPITE one of the most glowing earnings reports in the biotech company's history.

You read that right! On November 8, 2017, Regeneron published its Q3 2017 earnings, which showed "street-topping revenue" that "crushed" expectations with a 27.5% increase in adjusted income per share and a 23% increase in sales versus year ago period. (Investor's Business Journal)


The failure of a positive earnings report to stem the market's decline and fuel a rally is exactly the "hit or miss" nature of the earnings beast Jeffrey spoke about.

By contrast, Elliott wave analysis steered a clear, objective course that proved invaluable to traders and investors.

And while Elliott wave data enabled Jeffrey to anticipate the larger trend unfolding on Regeneron's weekly price chart, it also facilitated a strong assessment of the market's near-term prospects in his more recent, June 26, 2018 Trader's Classroom video lesson.

There, Jeffrey "moved down to a smaller, 60-minute time frame to examine the smaller Elliott wave substructure." The chart, pictured below showed that a large move up was on tap.


And here's what happened next:


In the same June 26 Trader's Classroom video lesson, Jeffrey also revisits REGN's larger trend, to answer the question:

"Is there sufficient evidence in place that the selloff from the 2017 high is complete?"

In the video, Jeffrey examines the data at hand and comes up with a strong case for one kind of move in the weeks and months ahead.

While not every Elliott wave forecast works out, the value of Elliott wave analysis is clear from this real-world example -- and from every Trader's Classroom lesson Jeffrey records for his subscribers. They come to you 3-5 times a week, and include instant access to the last THREE months of archived Trader's Classroom lessons, many with still-unfolding market opportunities.

Get Everything You Need to Start Turning Every Price Chart Into an Opportunity Map

As you saw in Jeffrey's video, every chart tells a story of the past....AND gives HUGE clues about what's going to happen next. What Jeffrey showed in the video is just a taste of what you need to know. In 60 days' time, you can take an accelerated track to becoming that trader who can rapidly scan a batch of charts and say "No...No...No...No...YES!"

Take the 60-Day Trader FastTrack and Learn to Spot the Best Opportunities in Any Market on Any Timeframe

We've put together this 60-Day Trader FastTrack collection to give you the essentials you need to spot opportunities FAST.


The Foundations

First, the Bloomberg Visual Guide to Elliott Wave Trading. In their bestselling book, Jeffrey Kennedy and co-author Wayne Gorman -- two of the most trusted experts in the field of technical analysis -- use real-life scenarios to show you exactly how you can unleash the Elliott wave method's power in your trading style. This book is available in our store for $60, but it's yours when you buy the 60-Day Trader FastTrack.


Trading Strategies

Second, Trading the Elliott Waves -- Winning Strategies for Timing Entry & Exit Moves. In this fast-paced, two-hour video, Robert Prechter -- NYT bestselling author, World-Trading Championship winner and Jeffrey's Elliott wave mentor -- reveals his favorite trading strategies. The video is available in our store for $99. It too is included in your 60-Day Trader FastTrack.


Real-Time Opportunities

Finally, Traders Classroom. Throughout your 60-Day Trader FastTrack, Jeffrey is your trading instructor. Three times a week, Jeffrey reveals a market opportunity -- often in real-time -- as a case study. He carefully walks you through the logic of the opportunity. If you have a question, you look for it in the included archives or one of the other subscriber-only resources. If you don't see it, you send Jeffrey a message and he does his best to give you an answer. Two months of this instruction service normally costs $154 -- but again, they are yours as part of your 60-Day Trader FastTrack.

Normally, these resources would cost you $313. For a limited time, the 60-Day Trader FastTrack collection gives you all of them for $99.

Act now -- and mark your calendar.

In 60 days, you will look back at today as the day you took your first step toward turning a chart into a plan of action.