TSLA, Dilemma of Previous wave is the key for future move !
Recognizing Wave relationships is a key step in decision making and adjusting expectations from the market.
TSLA, always shows some interesting aspect of wave relationships. Do we have a large degree completed wave cycle and inside a major correction which makes TSLA crash to unbelievable targets? Or we are experiencing a less amount of correction and will see new ATH before such a crash?
Answering to those questions needs going back and see what has happened in previous correction which began at former ATH 900.40 USD. Before taking a closer look to that correction lets see what we have for TSLA in Weekly chart.
Weekly chart which has been shown on lefts side suggest that TSLA's move from end of last correction dating back to 5 Mar 2021 or 19 May 2021 is onset of intermediate degree wave (5). If completed, this wave makes a primary degree wave 1 completed and calls for a major fall ! Is that a case? Is intermediate wave (5) and primary degree wave 1 completed? To answer this question wee need to take a closer look on daily chart and investigate previous correction and wave forms in more details.
Daily chart on the right side suggest two possible scenarios :
First and the best case one : Intermediate wave (4) correction has ended on 5th Mar 2021 at 539.49 USD. In this case 780.79 high on 14th Apr 2021 can be labeled as minor degree wave 1 (Terminal wave 1 which is not usual in Classic Elliott waves) , Low at 546.98 on 19th May 2021 can be labeled as wave 2 and ATH to be top of wave 3. In this scenario , we are in minor degree wave 4 which showed flat correction so far ( which is well matched with SPX and NDX 100 flat correction scenarios, See related idea for NDX 100 ). For this scenario to be valid , we need a strong bounce back to new ATH from 770-813 Support zone.
If happens, I can strongly recommend you to close your long positions at new ATH or go short since there will be a major crash just like what happened to ETSY , SQ, SHOP in stock market or SOLANA in Crypto ( See related ideas ). This scenario was pre-requisite of my publication titled " Elliott waves, Possibility VS Certainty ".
Second and worst case scenario : Intermediate wave (4) correction has ended on 19th may 2021 at 546.98 USD with truncated wave C. A truncated wave C does not go below the low of wave A and this may be the case for TSLA's wave (4). If so, Intermediate wave (5) and primary degree wave 1 have already been completed and we are inside wave 3 of primary degree wave 2 which means TESLA may crash to strange prices !.
To me, Both are valid with the best case one to be the most probable. If 770-813 support can not protect the stock I will think about second most probable scenario ( which is worst case) more seriously and seek for taking a SHORT position in appropriate time. For now I have my eyes on the mentioned support zone.
This analysis shows clearly that decision making in stock market is never an easy task.
Hope this to be useful for you. Good luck.
TSLA, always shows some interesting aspect of wave relationships. Do we have a large degree completed wave cycle and inside a major correction which makes TSLA crash to unbelievable targets? Or we are experiencing a less amount of correction and will see new ATH before such a crash?
Answering to those questions needs going back and see what has happened in previous correction which began at former ATH 900.40 USD. Before taking a closer look to that correction lets see what we have for TSLA in Weekly chart.
Weekly chart which has been shown on lefts side suggest that TSLA's move from end of last correction dating back to 5 Mar 2021 or 19 May 2021 is onset of intermediate degree wave (5). If completed, this wave makes a primary degree wave 1 completed and calls for a major fall ! Is that a case? Is intermediate wave (5) and primary degree wave 1 completed? To answer this question wee need to take a closer look on daily chart and investigate previous correction and wave forms in more details.
Daily chart on the right side suggest two possible scenarios :
First and the best case one : Intermediate wave (4) correction has ended on 5th Mar 2021 at 539.49 USD. In this case 780.79 high on 14th Apr 2021 can be labeled as minor degree wave 1 (Terminal wave 1 which is not usual in Classic Elliott waves) , Low at 546.98 on 19th May 2021 can be labeled as wave 2 and ATH to be top of wave 3. In this scenario , we are in minor degree wave 4 which showed flat correction so far ( which is well matched with SPX and NDX 100 flat correction scenarios, See related idea for NDX 100 ). For this scenario to be valid , we need a strong bounce back to new ATH from 770-813 Support zone.
If happens, I can strongly recommend you to close your long positions at new ATH or go short since there will be a major crash just like what happened to ETSY , SQ, SHOP in stock market or SOLANA in Crypto ( See related ideas ). This scenario was pre-requisite of my publication titled " Elliott waves, Possibility VS Certainty ".
Second and worst case scenario : Intermediate wave (4) correction has ended on 19th may 2021 at 546.98 USD with truncated wave C. A truncated wave C does not go below the low of wave A and this may be the case for TSLA's wave (4). If so, Intermediate wave (5) and primary degree wave 1 have already been completed and we are inside wave 3 of primary degree wave 2 which means TESLA may crash to strange prices !.
To me, Both are valid with the best case one to be the most probable. If 770-813 support can not protect the stock I will think about second most probable scenario ( which is worst case) more seriously and seek for taking a SHORT position in appropriate time. For now I have my eyes on the mentioned support zone.
This analysis shows clearly that decision making in stock market is never an easy task.
Hope this to be useful for you. Good luck.
Comment:
I Welcome and embrace any idea which can help to choose between these two scenarios before the fact . Please share your thoughts.
Comment:
Strong bounce back from 0.618 golden ratio Retracement. TSLA will face down trend line soon. I suppose it will make new ATH if it can break down trend line.
Comment:
Dilemma is going to be solved with left side chart more probable now. There is still one optimistic technical scenario which has little chance considering war and market condition.
Comment:
Our trade setup worked well :
