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
Gold dropped to $1770 mark on Tuesday before finding some support. The yellow metal is still testing its intermediate trend line support connecting $1721 and $1758 levels respectively.
The US dollar index carves a meaningful top around 96.88 mark over the last week. The index reversed sharply on Friday confirming a bearish Evening Star candlestick pattern on the daily chart.
EURUSD has carved a potential bottom at 1.1186 mark over the last week. EURO bulls have managed to stage a 150 pip rally thereafter, before pulling back.