Tesla might have carved primary Wave 2 around $880 levels on Tuesday. The tech stock has slipped through $865, producing an evening star candlestick pattern on the 4H chart. Prices need to stay below $900 resistance to keep the bearish structure intact.
Furthermore, Tesla needs to drop below $785 initial support to confirm its first step towards a larger bearish reversal. As seen here, Wave 2 was expected to terminate around $820-25 mark, which is fibonacci 0.786 retracement of Wave 1.
Tesla bulls have extended through $880, which is still potential Wave 2 termination. A bearish turn now and break below $785 will confirm that bears are back in control. Alternatively, a push through $900 will void the bearish structure in the short term.
The tech stock had dropped between $900 and $539 mark, subdividing into five waves carving an impulse. It is marked as primary Wave 1 on the chart here. The subsequent rally between $539 and $880 looks like a complex corrective wave (3-3-5), marked as Wave 2.
If the above proposed structure holds well, Tesla should reversal lower anytime soon and drag lower to $400 levels as Wave 3 begins to unfold.
The Profinacademy.com Team
Bitcoin dropped close to $46000 mark on Monday before finding support again. The crypto is seen to be trading around $46500 mark at the time of writing as bulls remain inclined to be back in control.
The US dollar index spiked through 96.85 mark on Wednesday on the back of the Federal Reserve interest rate decision.
EURUSD is finding support from its consolidation lower range around 1.1260-70 and could resume its rally from here soon.