August 5, 2021
Tesla seems to have hit an important resistance zone around $728 levels yesterday. The tech stock has hit a potential fibonacci convergence around $725/28 levels and high probability remains for a bearish reversal soon.
Ideally prices would stay below $780 resistance (previous swing high) to keep the bearish structure intact. If the above is correct, Tesla would resume lower soon and drag through $400 and $300 levels in the next few weeks.
Looking at the wave structure since $900 highs, Tesla might have carved Wave 1 around $539 lows and potential Wave 2 around $780 levels respectively. Also note that Wave 2 had travelled through fibonacci 0.618 retracement of Wave 1, a general guideline of the Wave Principle.
If the above holds well, Tesla might be well underway towards unfolding Wave 3 lower to $400 levels at least. Within Wave 3 as well, the tech stock might have already carved waves (i) and (ii) around $540 and $728 levels respectively.
Tesla bears might be inclined to unfold into a (iii) of 3rd wave lower towards $400 and $300 levels going further. Alternately, Wave 2 might be unfolding as a triangle structure and would consolidate further before terminating below $728 highs. Either ways, look lower from here.
The Profinacademy.com Team
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