Tesla has reversed from its recent swing highs around $693.00 levels over the last week. The tech stock closed at $646.00 yesterday as high probability remains lower from here. The minimum expectations for bears to target is $400.00 mark as highlighted on the 4H chart here.
Tesla had already dropped from $900.00 through $539.00 levels earlier, sub dividing into 5 waves. The impulse drop marked as Wave 1 was also a confirmation that there is further downside left for the stock. What followed through $780.00 level was a corrective rally.
The above corrective rally has been marked as Wave 2 of a similar degree, which also carried through fibonacci 0.618 retracement as seen here. Furthermore, the subsequent drop had stalled around $540.00 levels indicating a potential Wave 3 extension.
Lower degree waves (i) and (ii) of 3 are now looking to be in place around $54- and $693/97 levels respectively. If the above structure is correct, Tesla is on its way to carve wave (iii) of 3 lower through $400.00 and $300.00 mark respectively.
Traders might continue holding short positions with risk above $780.00 levels going forward. Bears seem to be in control and short term target potential remains $400.00 levels at least.
Finacademy Technical Team
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