Adobe: Entering the Fourth Wave — Smart Money Distribution Phase

10月30日

Adobe’s stock is entering a critical structural phase — the completion of its third global impulse and the start of the fourth corrective wave.
While the long-term uptrend remains intact, the price structure and fundamentals suggest that the most explosive growth period may already be behind us.

🧭 Long-Term Technical Context

Looking back to the early 2000s, Adobe has moved through a textbook Elliott Wave structure.
The first and second waves built the base, while the third wave delivered the explosive rally — from roughly $30 to $600, marking a 20x increase.

Now, the fourth subwave of the third major wave appears to be forming — a phase typically characterized by sideways consolidation and distribution by institutional players.

🔺 Wave 4 Triangle Formation

In many long-term wave structures, the fourth wave forms a triangle (ABCDE pattern) — a contracting structure where price oscillates between defined boundaries.

We can already observe the emerging shape:

• Wave A and B are complete
  
• Wave C is in progress
  
• Wave D and E will likely complete the pattern before the final breakout
  

Once the triangle ends, a final Wave 5 push could occur — potentially extending toward $700, or in an extended scenario, even $2000.

📊 Trading Range and Short-Term Strategy

At this stage, smart money tends to distribute positions gradually.
The price is oscillating within a broad corridor, providing opportunities for range-based trading:

• Buy zones: near the triangle lows (Wave A area around $350)
  
• Profit zones: near the triangle highs (Wave B area around $600)
  

For swing traders, this range offers multiple short-term opportunities before the next major move begins.

💵 Fundamental Context


Despite being in a late-wave structure, Adobe’s fundamentals remain strong.

• Share buybacks: The company continues to repurchase its own shares, supporting EPS growth.
  
• EPS trend: Rising steadily year over year.
  
• Revenue growth: Stable, around +10% YoY, with quarterly metrics showing +40% growth since Q1 2024.
  
• Forward P/E: Approximately 28, which, by Peter Lynch’s growth-to-PE logic, still appears reasonably valued.
  

These metrics suggest that even in a market downturn, Adobe’s downside risk may be more limited compared to weaker tech peers.

🧮 Fundamental Summary

✅ Consistent buybacks supporting EPS
✅ Double-digit annual revenue growth
✅ Attractive valuation relative to growth metrics
✅ Strong defensive profile versus the broader tech sector

There are no visible signs of fundamental weakness — only technical consolidation after years of exponential expansion.

⚠️ Alternative Scenario

If the stock breaks below $270, the current wave structure may need adjustment.
Such a move could imply a larger triangle or a flat correction, but the broader interpretation — that we’re inside a long-term Wave 4 — would remain valid.

📈 Market Outlook

Adobe is transitioning from a high-momentum growth phase into a strategic accumulation and distribution phase.
The stock is unlikely to replicate its earlier explosive rally, but it continues to offer structured trading opportunities inside a stable technical range.

For long-term investors, the risk-reward remains balanced, supported by solid fundamentals.
For traders, the triangle provides a clear framework: buy near lows, take profits near highs, and wait for the fifth wave breakout.

🧩 Summary

• Price structure suggests Wave 4 triangle formation
  
• Trading range between $350–$600
  
• Fundamentals remain strong and defensive
  
• Forward P/E at 28 — reasonable given EPS growth
  
• Next major target: Wave 5 breakout toward $700–$2000
  

Adobe is no longer in its most explosive phase — but it’s far from weak.
This is a mature consolidation period, not a decline story.
For disciplined traders, the triangle may offer some of the cleanest swing setups in the tech sector.

11月23日

ノート

Since the last analysis, the overall picture for ADBE has remained largely the same. We are still moving inside the fourth wave of the larger cycle and continue forming wave C. Wave C in this type of structure can finish at any moment, after which wave D should begin.

🔷 Structure of the Fourth Wave

The current configuration does not have to complete as a triangle. A flat pattern is also possible here. In major fourth waves, flat structures appear frequently, while the triangle is just one of the possible outcomes. However, triangles are common because they provide enough time and volatility for distribution by large players.

At the moment, the price action still looks like a potential triangle, but this remains a working hypothesis, not a confirmed fact.

❗ Invalidation Level for the Triangle Scenario

The key area is around 275.
If price moves below 275, the triangle scenario is invalidated.
But even in that case, the fourth wave remains intact and can simply shift into a flat formation.

Important: even if the triangle is canceled, the larger structural interpretation does not change. The fourth wave continues, only in a different form.

🟦 Why 255 Is Important

There is an interesting observation regarding the depth of the correction.
A global fourth wave often pulls back into the area of the previous fourth subwave. In this case, that subwave was located near 255. The first corrective wave A bottomed at 275 and did not break below 255. As long as price stays above this level, the triangle scenario remains technically possible.

📈 What to Expect Next

We are positioned in the lower part of the fourth wave.
Technically, a rebound is likely, although it is unclear whether the market will dip slightly lower first or turn up from the current zone. The exact timing is unpredictable, so it is mainly a matter of observing how price behaves around current support.

In the medium term, we are likely to see more sideways movement. Once the entire flat or triangle structure completes, the market should resume its upward path.

The minimum upside target after the fourth wave remains unchanged.
This is a move back toward the 700 area and potentially higher, with a strong possibility of breaking the previous all time high.

🧩 Summary

• Wave C is likely approaching completion
  
• The triangle scenario remains valid while price holds above 275
  
• A break below 275 shifts the structure into a flat
  
• Long term support remains near 255
  
• After consolidation, a move toward 700 and higher is expected
  
• The current phase continues to be a large and extended sideways model