e.l.f. Beauty Stock Outlook: Post-Rally Uncertainty Sets In

e.l.f. Beauty ELF has completed its Adhishthana Himalayan formation and now stands in a phase of structural uncertainty. The stock is currently in phase 11 of its 18-phase Adhishthana cycle on the weekly chart, having spent more than 750 days inside its Himalayan Formation. Here's a breakdown of where things stand and what may lie ahead.

Weekly Chart: e.l.f. Beauty’s Peak Confirmed, Descent Complete

Under the Adhishthana Principles, a stock typically breaks out of its Cakra formation in phase 9. This initiates the Himalayan Formation, a three-leg structure involving ascent, peak, and eventual descent.

e.l.f. Beauty followed this pattern closely. The stock began its ascent in phase 9, rallying approximately 104 percent. The move intensified in phase 10, with another 138 percent upside. Phase 10 is typically when the peak is formed.

"The 18th interval is expected to be the level of peak formation; if not, then the 23rd interval. If this phase concludes without forming the peak, it is anticipated to occur in the following phases."
— Adhishthana: The Principles That Govern Wealth, Time & Tragedy

e.l.f. Beauty peaked precisely within this window. On the 17th bar of phase 10, the stock reached a high of 221 dollars, followed by a 12 percent decline on bar 18, confirming the peak as per the model.

After the peak, the stock began its descent phase, the Wrath of Ganga. According to the principles, this leg is associated with steep selloffs that typically take the stock back to its phase 9 breakout levels. e.l.f. Beauty followed this path exactly, falling 78 percent over the next 400 days, from its high of 221 to a low near 48.

This is the strength of the Adhishthana Principles. Their precise, forward-looking model helps investors time their strategies with clarity and accuracy.

Now in phase 11, the stock has completed the descent leg of the Himalayan Formation and has entered a neutral zone on the weekly chart.

Monthly Chart: A Misaligned Phase 2

The monthly chart shows e.l.f. Beauty is currently in phase 2, which consists of two segments. The first is the Sankhya period, generally marked by bearish moves or consolidation. The second is the Buddhi period, during which the bullish structure typically resumes. However, e.l.f. Beauty did not follow this textbook pattern. Instead, the stock rallied strongly during the Sankhya period, which was naturally punished by the forces during the Buddhi period.

This misalignment reflects poorly under the principles. According to the model:

"Decisions should follow only when alignment with the Principles of Adhishthana is achieved. If Phase 2 is not executed properly, the Yajña, C5 and C6 must be observed before making a decision."
— Adhishthana: The Principles That Govern Wealth, Time & Tragedy

This means e.l.f. Beauty’s long-term direction will only become clearer once the structural milestones ahead, particularly Yajña and Phase 5 (C5), begin to take shape.

Investor Outlook

The weekly chart suggests e.l.f. Beauty's Himalayan move has run its course. The peak is in, and the descent is complete. The stock is now neutral on that timeframe. Meanwhile, the monthly structure is misaligned with the principles, introducing uncertainty into the forward path.

Investors who entered after the descent phase, around the 50-dollar range, may continue to hold. However, new investors should wait for confirmation from upcoming structural phases on the monthly chart before initiating any fresh positions.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.