Tesla’s lower top might be in place around $729

Technical Analysis:

Tesla might have carved a meaningful lower top around $729 levels on August 13, 2021. The tech stock had dropped through $678 indicating a potential bearish reversal ahead. Ideally, prices would stay below $729 mark, going forward.

Tesla’s wave structure since $900 highs might be indicating a bearish move lower as well. The initial drop between $900 and $540 had sub divided into 5 waves marked as Wave 1 on the chart here. Wave 2 had managed to unfold into 3 waves and reach up to fibonacci 0.618 retracement of Wave 1 around $780 levels thereafter.

Tesla needs to stay below $780 levels to keep the larger degree wave structure bearish towards $400 and $300 levels respectively. Looking into the sub waves further, the tech stock might have carved lower degree waves (i) and (ii) around $540 and $729 levels respectively.

If the above is correct, Tesla might be preparing to unfold wave (iii) of 3 lower towards $400 and $300 respectively. A break below $630 initial support will confirm the downtrend and accelerate further keeping bears in control.

Alternately, Wave 2 might still be unfolding as a triangle and prices might drift sideways further to terminate the triangle consolidation. Either ways, Tesla might be looking lower until prices stay below $729 highs registered over the last week

Prepared by

Finacademy Technical Team