Tesla has been drifting sideways between $700 and $722 since last several trading sessions as we await a breakdown in price below $630. This would confirm a bearish reversal ahead and that the tech stock is heading lower towards $400 and $300 respectively.
Tesla had peaked through $900 levels in January 2021 and since then it has carved Waves 1 and 2 lower around $540 and $780 levels respectively. Please note that Wave 1 had clearly sub divided into 5 waves while Wave 2 was corrective, pushing through fibonacci 0.618 retracement of Wave 1.
Since then, Tesla has been working on Wave 3 lower and has carved a lower degree waves (i) and (ii) around $550 and $720 levels respectively. Also note that wave (i) was an impulse, while (ii) was corrective, as a fractal market would be.
If the above is correct, Tesla would stay below $780 and turn lower from here; dragging prices lower towards $400 and $300 levels respectively. Please also note that the above structure proposes (iii) of 3rd wave decline, which could be very steep and quick.
Alternately, Tesla might be still working on Wave 2 as a triangle. If it is correct, we might witness some more sideways action before the stock resumes lower to $400 and further. Either way, we are looking lower against $780 levels.
The Profinacademy.com Team
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