Tesla has managed to pull back towards $620 levels after dropping through $546 lows over the last week. The recent rally looks to be clearly corrective and might be lower degree wave iv, before reversing lower below $539 levels immediately.
Tesla is poised to break through $400 mark and take out support around $380 levels as seen on the 4H chart here. The tech stock might produce intraday rallies going forward, but these should be taken as opportunities to add short positions.
A minimum projected fibonacci targets are pointing towards $400 and $300 levels in the short term. Also note if the correction is at a larger degree like major indices Dow Jones and SPX500, Tesla may continue to drop well below $300 mark.
Immediate interim support is seen around $539, while resistance would be strong at $780 levels respectively. Counter trend rallies through $700 zone still remain possible and might provide potential selling opportunities.
Looking at the wave structure, Tesla had earlier produced an impulse rally between $37.00 and $900.00 levels since June 04, 2019. It is now unfolding a corrective drop at a similar degree and might have completed Waves 1 and 2 around $539 and $780 levels respectively.
It is expected to produce a 5-3-5 (Zigzag) or 3-3-5 (Flat) corrective structure going forward. A reaction around $300 levels will help determine the type and degree of the correction. Most traders might want to hold short positions in Tesla for now.
Finacademy Technical Team
EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.
US Dollar Index has raised through 92.00 levels as of now and bulls are looking poised to extend further through 95.00, 96.00 levels in the next few weeks. It is quite possible that they continue higher from here itself or after a pullback, but prices stay above 89.60 levels.
USDJPY breaks higher towards 110.80 levels yesterday as the technical direction was clear and discussed here. At times market awaits a trigger to push through its determined trend; it was the Fed interest rate yesterday that provided the same.