Tesla continued its decline and is looking to carve an interim bottom around $550 levels or it has managed to carve around $559 recently. The tech stock trades around $576 levels for now and could pull back towards $670 levels anytime soon.
The above counter trend rally when materializes, should be taken as yet another opportunity to initiate additional shorts. Please note that downside potential remains towards $400 and $300 lows respectively.
Tesla wave counts since $900 highs are as follows: The drop between $900 and $539 could be Wave 1 since it was sub divided into 5 waves, making an impulse. The subsequent rally towards $780 highs unfolded into 3 waves a-b-c, hence corrective.
Also note that the correction had reached fibonacci 0.618 retracement of Wave 1, a common guideline for termination of Wave 2. If the above structure holds well, Tesla would be seen to be trading around $400 and $300 levels in next few weeks.
Wave 3 seems to be already underway since $780 highs and all rallies should be corrective from here. It is quite possible that lower degree wave I of 3 is in place at $559 or could be soon in place around $549 levels, going forward.
If correct, Tesla might produce a lower degree wave ii of 3 towards $670 levels before resuming lower again. Traders might take partial profits around current levels and prepare to initiate shorts at higher levels again.
Finacademy Technical Team
EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.
US Dollar Index has raised through 92.00 levels as of now and bulls are looking poised to extend further through 95.00, 96.00 levels in the next few weeks. It is quite possible that they continue higher from here itself or after a pullback, but prices stay above 89.60 levels.
USDJPY breaks higher towards 110.80 levels yesterday as the technical direction was clear and discussed here. At times market awaits a trigger to push through its determined trend; it was the Fed interest rate yesterday that provided the same.