August 31, 2021
Tesla could be still carving its primary Wave 2 as prices pushed towards $730 at close on Monday. The tech stock could be unfolding as a combination W-X-Y since $53 lows, to terminate Wave 2. If correct, the stock might reach $780 or near-by, before reversing lower again.
Tesla had rallied towards $900 mark before reversing lower to $539 sub dividing into 5 waves, which is marked as Wave 1 here. The subsequent rally to $780 was corrective and could be labelled as potential Wave 2.
Furthermore, the subsequent price action since $780 could be a series of 3 waves. It is quite possible for Wave 2 to be still unfolding as a combination or triangle. If the latter turns out to be correct, Wave 2 might terminate close to $780 mark.
Either way, Tesla should ideally remain bearish until prices stay below $900 levels going forward. Immediate support is seen at $660 now, and a break below that mark would confirm a bearish reversal ahead.
Traders might remain poised to initiate fresh short positions between now and $780, with a potential stop above $900 mark and target below $400 levels.
Finacademy Technical Team
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