Tesla has been drifting sideways after having print $806 high on October 4. The tech stock should ideally stay below $806 and turn lower from here. A drop below $758 would be encouraging for bears to drag further as they take control back.
Tesla wave structure is a classic text book example of the Elliott Wave Principle. The pattern has unfolded as a five wave drop followed by a three wave corrective rally. The drop from $900 high through $539 was clearly subdivided into five waves, marked as Wave 1.
The subsequent rally from $539 lows through $806 high early this week can be subdivided into a 3-3-5 patter, which is classified as a standard flat. The corrective a-b-c pattern looks to be complete at $806 mark, which is close to fibonacci 0.786 retracement of Wave 1.
Furthermore, the Elliott Channel resistance has also been hit around $806 zone, which could trigger a sell off soon. Having said that, probabilities remain for another push toward $820 mark before finding meaningful resistance.
Either way, traders might want to remain short against $900 mark, with a potential trend reversal towards $400 mark, going forward.
The Profinacademy.com Team
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Tesla has been drifting sideways after having print $806 high on October 4. The tech stock should ideally stay below $806 and turn lower from here.