Tesla remains bearish until prices stay below $780

Written by Finacademy.io

June 15, 2021

Technical Analysis:

Tesla pullback has managed to reach $620 mark recently and might push further towards $670 levels going further. It is expected to reverse thereafter and drag lower towards $400 and $300 levels respectively.

Tesla had rallied between $37.00 and $900 levels in the past 02 years, clearly sub dividing into 5 waves. The above impulse rally has been at a larger degree, and hence the corrective drop might be much deeper, going forward.

At a minimum, we are expecting an A-B-C zigzag corrective drop where Wave A unfolds into 5 waves, B sub divided into 3 waves and C again into 5 waves. Looking at the drop since $900 mark, Tesla has dropped to $539 levels sub dividing into 5 waves.

It has been marked as Wave 1, which was followed by a corrective rally A-B-C rally towards $780 levels respectively. The subsequent rally could be marked as potential Wave 2 as depicted on the chart here. If the above is correct, Tesla has been unfolding Wave 3 lower towards $400 at least.

Furthermore, within Wave 3 Tesla might be producing lower degree waves. The drop to $540 mark might be lower degree wave I and the subsequent pullback could be wave ii around $620 levels respectively.

If the above holds well, Tesla could be soon underway within wave iii of 3 towards $400 and $300 subsequently. Most traders might hold on to their existing short positions.

Prepared by

Finacademy Technical Team

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