Fiverr International is another online marketplace name that shows a promising future. When taking a look at the chart since the IPO in 2019, a strong bullish trend has emerged. In which, the price action is very constructive for the bulls. Before I get into the charts, lets take a look at what the company does:
“Fiverr was founded by Micha Kaufman and Shai Wininger, and was launched in February 2010. The founders came up with the concept of a marketplace that would provide a two sided platform for people to buy and sell a variety of digital services typically offered by freelance contractors. Services offered on the site include writing, translation, graphic design, video editing and programming. Fiverr’s services start at US$5, and can go up to thousands of dollars with gig extras. Each service offered is called a “gig”.
The website was launched in early 2010 and by 2012 was hosting over 1.3 million Gigs. The website transaction volume has grown 600% since 2011. Additionally, Fiverr.com has been ranked among the top 100 most popular sites in the United States and top 200 in the world since the beginning of 2013.”
Lets take a look at the Fiverr Elliott wave count.
Fiverr Elliottwave View:
Medium term term view from 3/18/2020 lows of 20.42. It is currently factored that this stock is still within the March Cycle rally. This means that the cycle from that March low is still on going, further extension higher is expected. After the March 2020 cycle peaks, this stock is favoured to correct with the rest of the broad markets. This should provide an excellent buying opportunity on a 3, 7 or 11 swing pullback against the March low.
From the lows at 20.42 set in March 2020, Fiverr showcases clean swings. Black ((1)), ((2)), ((3)), and ((4)) are all favoured set with ((5)) in progress. There is a divergence in the daily timeframe on RSI, which tells us that a 5th wave is due. I do not like to short this stock, but prefer to look for an extreme area pullback in Red II, to an equal leg extreme where risk reward can clearly be defined. Further upside extension right now is favoured to take place, there is no specific area where Red I can peak. All this to say, is that it is favoured that ((5)) of Red I is in progress, so caution may be warranted heading into this final 5th wave.
In conclusion, the structure from the March low is bullish, there is no denying that. But the thing to take note in the present time is the risk to establishing new long positions. The trend is getting mature, and a correction against that March low is favoured to take place at some point in the coming months ahead.
Using proper risk management is absolutely essential when trading or investing in a volatile stocks. Elliott Wave counts can evolve quickly, be sure to have your stops in and define your risk when trading.