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

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