Tesla completes flat correction around $631 levels

Technical Analysis:

Tesla has been drifting almost sideways since last few trading sessions and might have completed a Standard Flat correction around $631 yesterday. Possibilities still remains for a push through $670 levels to test resistance trend line, before resuming lower again.

Tesla needs to drop below $539 levels to complete the corrective wave structure that had begun since $900 highs earlier. The stock had dropped between $900 and $539 levels, sub dividing into 5 waves marking an impulse structure.

Further, a corrective rally had unfolded through $780 levels before finding resistance. Also note that the correction had managed to reach through fibonacci 0.618 retracement of the earlier drop. Since then, bears have been poised to push below $539 at least to complete the drop.

Looking at the wave structure, Tesla seems to have completed Wave 1 and 2 around $539 and $780 levels earlier. Since then it is progressing within Wave 3 lower and is expected to reach at least $400 levels in the next wave. Potential remains to extend through $300 levels as well.

Most traders might remain short from $780 levels as suggested earlier, with potential targets around $400 and $300 levels in the near term. Look to add more shorts around $670/80 levels as well.

Prepared by

Finacademy Technical Team