Tesla terminates Wave (ii) at $725/26 mark. Lower from here?

Technical Analysis:

Tesla remained sideways for several trading sessions and has now rallied to $725 mark. The wave counts are adjusted here according to price action as wave c might have terminated around $725 levels. Please note that wave c sub divided into 5 waves where lower degree wave iv was a triangle.

If the above lower degree counts hold well, Tesla might resume lower from current levels ($710) and a break below $630 will confirm that a meaningful top is in place at $725 levels respectively. The next big move is expected to be lower towards $400 and $300 respectively.

Tesla has rallied through fibonacci 0.786 retracement of the recent drop between $780 and $540 levels. It is also the convergence point of fibonacci 0.618 retracement of the entire drop from $900 levels respectively. A bearish reversal from here remains high probability.

Looking at the wave structure since $900 highs, Tesla might have carved Waves 1 and 2 around $539 and $780 respectively. Furthermore, the tech stock seems to have terminated lower degree waves (i) and (ii) around $540 and $725 mark as well.

If the above is correct, Tesla bears might be back in control from here and drag prices lower towards $400 and $300 levels respectively.

Prepared by

Finacademy Technical Team