Tesla seems to be preparing for a bearish reversal towards $400 and up to $300 levels in the next few weeks. The tech stock has tested its trend line resistance since $900 highs and spiked through $700 highs over the past week, just above $690 levels.
We had projected fresh short positions around $690 levels last week since it was fibonacci 0.618 retracement of Tesla’s recent drop between $780 and $540 levels respectively. The stock has pushed a bit higher towards $700 mark before reversing lower again.
Tesla is seen to be trading around $678 levels for now and a break below $670 will confirm that a meaningful top is in place and bears are back in control. If the above unfolds accordingly, the stock seems to be underway towards $400 levels in the next few weeks.
Looking at the wave structure, Tesla seems to be progressing into Wave 3 since $780 highs. Lower degree waves (i) and (ii) seem to be in place around $540/50 and $700 respectively. If the above is correct, Wave (iii) of 3 might be in progress now.
Also note that 3rd of 3rd waves are very sharp and swift, hence expect a strong bearish reversal ahead. Trades might remain short with risk above $780 and potential target below $400 levels, going forward.
Finacademy Technical Team
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