Berkshire Hathaway (BRK.B) is described as being in an upward Elliott Wave trend, with higher highs and higher lows over recent years. The advance is labelled as an impulsive cycle that moved into wave ((3)) before a correction began.
After wave ((3)) ended, the stock moved into wave ((4)), which is presented as a complex correction. The correction is labelled as a W-X-Y pattern, which is associated with sideways-to-downward consolidation and multiple swings.
Wave Four Support Zone
Wave ((4)) is projected to move lower towards a support zone between 433 and 388. This area is linked to Fibonacci levels, including 1.0 and 1.618 extensions of earlier corrective swings.
After wave ((4)) completes, the next rise is labelled wave ((5)). The move is expected to push above the prior wave ((3)) high and continue the longer-term trend.
The text also refers to potential set-ups after the correction completes a 3, 7, or 11 swing structure within the 433–388 zone. The overall view presented is that a pullback into this range could precede a further upward phase.
We see Berkshire Hathaway is in a long-term bullish cycle, though it is currently in a corrective pullback. Derivative traders should be patient, as the stock is expected to find a floor in the $433 to $388 range in the coming weeks. Selling into this expected weakness would be ill-advised.
Options Strategy Considerations
This anticipated dip aligns with broader market uncertainty, as April 2026 inflation data has futures markets pricing in a delayed Fed rate cut. Despite this, Berkshire’s fundamentals remain solid, with Q1 2026 operating earnings showing an 8% increase year-over-year, driven by its insurance and railroad segments. The company’s cash pile also grew to a record $210 billion, providing a significant buffer.
A practical approach is to consider selling cash-secured puts with strike prices within that $433 to $388 support zone. By choosing expirations 45 to 60 days out, like those for June or July 2026, traders can collect premium while waiting for the expected bottom to form. This strategy allows one to either keep the income if the stock stays above the strike or acquire shares at a more attractive price.
Alternatively, once the stock shows signs of stabilization in the support area, buying call options or establishing bull call spreads could be effective. Look for a clear reversal pattern before entering, targeting a move that would eventually take the stock above its previous highs. We recall a similar setup in early 2025, where a brief consolidation preceded a strong 15% rally over the following quarter.
Given that corrective patterns can be complex, it is important to manage position size. Implied volatility may increase as the stock approaches the lower end of the support range, making option premiums more expensive for buyers but more attractive for sellers. This highlights the potential advantage of selling puts during the initial stages of the decline.
