PHG, Koninklijke Philips NV ADRs, is Philips seeing the light?

phg sept 23 2014

Philips has always been primarily a light company, that is glowbulbs as the original name “Gloeilampen fabriek” indicated. Over time the company diversified into multiple different areas and now, apparently, it has decided to consolidate into two separate groups, Light and Health. Big is bad and small is good. Will it work? Perhaps but if the EW pattern is an indicator it will not, at least not initially.

After the 2008 drop the stock has almost retraced all the losses but it has done so in a very clear a-b-c pattern which, by it’s very nature, is corrective. The outlook therefore is for another wave down comparable to the 2008 one. Not a buy, unfortunately.