Tesla had pushed through $1712 mark yesterday before closing in around $707.00. The tech stock has remained below its critical resistance around $729 for now, keeping the bearish structure intact. A drop below $650 from here will confirm that the trend has turned bearish.
Tesla has got potential to drop towards $400 and $300 mark, going forward. Looking at the wave counts from $900 highs, the stock has carved Wave 1 impulse around $540, followed by corrective Wave 2 rally towards $780 levels already.
Also note that Wave 2 had travelled up to fibonacci 0.618 retracement of Wave 1, a typical guideline of Wave Principle. If the above is correct, Tesla is headed lower towards $400 at least as Wave 3 unfolds. Furthermore, please note that Wave 3 might be unfolding as an extension as it has managed to carve intermediate waves (i) and (ii) around $540 and $729 levels.
Above structure is clearly depicting a bearish structure but prices need to stay below $729, going forward. Immediate bearish confirmation can be had once Tesla breaks below $640 initial support. Traders might prepare to remain short against $729.
Prepared by
The Profinacademy.com Team
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