Tesla re-tests 690 resistance zone. Prepares to turn lower again

Written by Finacademy.io

July 14, 2021

Technical Analysis:

Tesla has re-tested its lower degree Wave (ii) highs around 693 levels early this week and turned lower again. The tech stock had closed lower by -2.5% yesterday around 668 levels as seen here. If the above resistance at 697 holds, expect a sharp bearish reversal.

Tesla is also seen to be testing its resistance trend line from 900 highs for now, and a turn lower from here would instil further confidence to the above bearish structure. Potential remains for a drop towards 400 and 300 mark respectively.

Looking at the wave structure, Tesla had dropped from 900 through 539 levels sub dividing into 5 waves, marked as Wave 1 on the chart here. The subsequent counter trend rally unfolded into 3 waves a-b-c, labelled as Wave 2 here.

Also note that Wave 2 had retraced up to fibonacci 0.618 of Wave 1, which is a common guideline. Going further, the drop from 780 through 540 also sub divided into 5 waves, labelled as lower degree wave (i) on the chart here.

The recent upswing towards 697 unfolded as a corrective rally labelled as lower degree wave (ii) respectively. If the above holds well, wave (iii) of 3 should be underway soon towards 400 levels at least.

Prepared by

Finacademy Technical Team

Related Articles

US dollar index is bearish against 97.00

US dollar index is bearish against 97.00

The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support.