Tesla prepares for a bearish reversal towards 403.00?

Technical Analysis:

Tesla has been drifting sideways with a downward bias since printing lower highs around $708 last week. After bringing a long term wave structure last week, we present the medium term outlook for the stock on a 4H time frame today.
Tesla wave structure since printing all-time high around $900, is as follows: The drop between $900 and $539.60 was an impulse wave, clearly sub dividing into 5 waves. The drop has been labelled as Wave 1 of a larger degree impulse or A of a corrective drop.
Also note that Tesla had broken its immediate trend line support during the above decline, and entered into the sell zone for the first time since printing $900 highs. The stock was expected to produce a corrective rally or pullback thereafter.
As seen on the chart view, the stock had managed to reach up to $717 highs, close to the fibonacci 0.50 retracement of the above drop. Ideally potential remains for a push through $750/60 levels, which is the fibonacci 0.618 retracement but Tesla has remained subdued since few trading sessions.
Strong resistance is seen at the $900 handle for now and even if bulls attempt to rally, prices should remain well capped below $900, going forward. Further, it remains quite possible that a lower high has already been carved around $717 levels.
If the above wave structure holds well, Tesla bears might succeed for another round of selloff, which drags lower towards $400 levels. A drop below $595 will confirm that the next bear leg is underway already.

Prepared by

Finacademy Technical Team