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This S&P 500 Stock Is Up 50% in 2019 & It’s Just Getting Started

Last Updated September 23, 2020 12:55 PM
Kiril Nikolaev
Last Updated September 23, 2020 12:55 PM

By CCN.com: Xerox (XRX) has been one of the S&P 500’s most impressive surprises in 2019. The 113-year-old stock has climbed nearly 50 percent already, and its technical picture suggests the rally is just getting started.

Experts point to the hiring of a new CEO, John Visentin , as the primary driver of growth. With Visentin at the helm, the company is expanding margins by streamlining operations through Project Own . The initiative is expected to drive gross savings of $640 million.

In addition to Project Own, Visentin has also established a shared services operation center that’s expected to save an additional $90 million this year.

xerox stock
Xerox stock is one of the S&P 500’s surprises for 2019. | Source: Shutterstock

As Xerox is not a high growth company, these savings will significantly improve the company’s bottom line.

However, are these measures enough to keep the century-old company’s stock rising? These are steps in the right direction, but the stock is still down by over 82 percent from its all-time high.

Xerox May Be in the Latter Stages of a Multi-Year Accumulation Period

The technical picture suggests that Xerox’s ascent is just getting started. That’s because the stock has been trading in a wide range between $13 and $50 with a midpoint at $31.50 for almost twenty years.

Since October 2009, we’ve seen a significant increase in volume. This tells us that the smart money investors are currently accumulating shares. They are building the base in preparation for what could be a monster bull run.

After all, there’s a saying that goes, “the longer the base, the higher the space.”

Xerox stock price chart showing volume rise
Xerox looking hot as buyers return in droves | Source: TradingView

In addition, Wyckoff Stock Market Institute  owner Todd Butterfield  spoke to CCN.com and shared his view on Xerox. The Wyckoff expert said:

“In late 2015, it had stopping action in the form of a Wyckoff sequence of Preliminary Support (PS), Selling Climax (SC), Automatic Rally (AR), and a Secondary Test (ST). Then, it began trading range activity where accumulation became evident.”

Xerox chart provided by Todd Butterfield
Xerox stock technical analysis | Source: Todd Butterfield

Mr. Butterfield continued:

“After being a laggard, the Shakeout put it in the position to have a sharp rally in the first half of 2019. It has then been working on a constructive Backup To The Creek. This backup also came at the 50% retracement level that Mr. Wyckoff always used as a bullish signal. Xerox is now in a position to respect the Backup level and begin another markup to the upside.”

Looks like Xerox is just warming up. The stock may hit the resistance of $50 by year-end.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.com.