Quanta Services Inc – Reversal is Approaching for 35% Shorting O

19 ago 2022

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Fundamental Indicators:

• Sector – Industrials
  
• US Business Cycle Stage – late cycle, when this sector is neutral
  
• Revenue – consistent growth for the past 5 years, with 12% average annual rate
  
• Profits – slight drop in 2022 TTM compared to 2021
  
• Net margin – quite low with 3%
  
• P/E – quite high with 45 ratio compared to S&P500 with 21 and Industrials sector with 21
  
• Liabilities - debt ratio is at 0.61 which is within the norm, Net Debt/ EBITDA is 2.87 – no problems with debt
  
• Conclusion – consistently performing but a little overpriced hence likely to go into correction
  

Technical Analysis (Elliott Waves):

• Main scenario of this idea suggests that we are still observing development of the global growth cycle which is currently at the stage of forming corrective wave 4 of higher degree fifth wave (see higher timeframe graph)
  
• From the point of 2020 correction which has been shaped as a Running Triangle this company has enjoyed explosive growth with nearly 500% in stock appreciation
  
• Looking at the lower timeframe it is clearly identifiable that following contracting triangle between April and July 2022 there is a choppy fifth wave which is likely to be an Ending Diagonal (see guidelines for Ending Diagonals below). Wave A of the fifth in this Ending Diagonal is completed and we can expect wave B and C to finalise it
  
• Once it reaches the peak of $148.84, we are likely to see a reversal with mid-term trend towards the level of circa $93 – which may present circa 35% shorting opportunity
  

This is a higher timeframe to reflect the full history of Quanta Services Inc and to provide full wave count:
https://www.tradingview.com/x/8ZrCnvZN/

This is the link to the guidelines for Ending Diagonals

What do you think about Quanta Services Inc and its short term prospects?
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