Tesla is still carving primary Wave 2 around $800 mark

Written by Finacademy.io

October 12, 2021

Technical Analysis:

Tesla seems to be moving sideways since October 4, after printing high around $806 level. The indice has already hit its Elliott Channel resistance just above $800 mark and could be soon preparing to turn lower. Please note that $820-25 is the resistance zone.

Tesla had earlier dropped from $900 highs through $539 lows, subdividing into five waves, which is labelled as primary Wave 1 on the chart here. The subsequent rally has been complex, but structurally it looks like a potential standard flat 3-3-5 structure.

Tesla might have terminated its corrective phase around $806 early this month or it is still looking to terminate around $820-25 zone. We have labelled potential Wave 2 termination around $806 on the chart and a break below $866 will confirm.

Also note that Tesla has tested its past support turned resistance around $806 and reached up to fibonacci 0.618 retracement of Wave 1 already. Having said that, potential remains for a test of $820-25 resistance zone before turning lower again.

Traders might want to position themselves on the short side around $800-20 zone, with risk above $900 and potential reward below $400 levels going forward.

Prepared by

Finacademy Technical Team

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