Tesla might be preparing to resume lower towards $400 and $300 at least, as bears remain poised and in control. The tech stock faces immediate resistance at $700 levels, which is also marked as Wave (ii) termination on the 4H chart presented here.
Tesla’s wave counts from $900 levels has unfolded as follows: The initial drop between $900 and $539 was a clear impulse, labelled as primary Wave 1. Its subsequent rally towards $780 was in 3 waves, hence corrective and reached up to fibonacci 0.618 retracement of Wave 1.
The above has been labelled as Wave 2 here, a typical fibonacci correlation according to the Elliott Wave principle. If the above is correct, Tesla is progressing lower into primary Wave 3 and would stay below $780 levels, going forward.
Further, Wave 3 seems to be extending itself and has produced lower degree waves (i) and (ii) around $540 and $700 levels respectively. Ideally, prices would stay below $700 if the above counts hold well as Tesla prepares for a sharp decline towards $400 mark from here.
Structurally, the tech stock seems to be on the verge to begin its 3rd of 3rd wave decline from $660/70 levels now. Traders might want to remain short as the drop is expected to be sharp towards $400 and subsequently $300 levels.
Finacademy Technical Team
EURUSD might have carved a potential bottom around 1.1690-1.1700 over the last week. The currency is trading above 1.1720 at the time of writing as bulls prepare to push higher towards 1.2050-1.2100 in the next few weeks.
SPX500 has rallied through 4460-80 zone yesterday, carving potential Wave 2 correction. The counter trend correction has also reached fibonacci 0.618 retracement of Wave 1 as highlighted on the 4H chart here. The indice might resume lower soon from current levels.
USDJPY might be unfolding a combination to terminate Wave (4) towards 10.50 over the next few weeks. A potential ending diagonal could be unfolding from 110.50 mark as bears remain poised to drag below 108.50 in the next sub-wave.