Tesla remains bearish until prices stay below $780

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 3^rd 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.

Prepared by

The Profinacademy.com Team