Tesla carves Wave 2 around $800 mark

Written by Finacademy.io

September 28, 2021

Technical Analysis:

Tesla had raised through $798 levels on Monday before pulling back, and closed around $790. The recent rally might have completed a standard flat corrective structure (3-3-5), which had begun since $539 lows on March 5.

Tesla had rallied through $900 all-time high on January 25 before reversing lower. The tech stock slipped to $539 mark subdividing into five waves. The termination was an impulse, which could be labelled as primary Wave 1.

Since then, we can count a 3-3-5 wave structure, which is a standard flat. The termination of its sub waves are as follows: wave ‘a’ rallied through $780, wave ‘b’ dropped terminated around $540 and potential wave ‘c’ might have completed at $798.99 on Monday.

The above corrective rally could be labelled as primary Wave 2, which has reached closed to the fibonacci 0.786 retracement of Wave 1. If the above structure is correct, Tesla should stay below $900 mark and reverse lower towards $400 anytime soon.

Tesla faces strong resistance around $820, followed by $900; while support is at $720 levels respectively. A break below $720 will confirm that a meaningful top is in place and bears are back in control. Traders might want to position themselves on the short side against $900.

Prepared by

Finacademy Technical Team

Related Articles

Gold finds support ahead of $1758 mark

Gold finds support ahead of $1758 mark

Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.

US dollar index carves a potential top at 96.88

US dollar index carves a potential top at 96.88

The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.

en_US