Tesla Stock is Vulnerable to a 40% Elliott Wave Decline

Tesla , Inc., formerly Tesla Motors, Inc., designs, develops, manufactures and sells fully electric vehicles, and energy storage systems. Its market cap is approximately $86 billion.

In Tesla's case, investors have been too optimistic recently. The stock is up 186% in the past six months, climbing from $177 low in May 2019 to $499 this month. Unfortunately for the bulls, no trend lasts forever. Therefore, once investors run out of optimism, the stock is likely to fall significantly. The question is, How soon?

In order to find out if Tesla stock is a good pick now near $500, let’s take a look at its Elliott Wave chart above.

The daily chart shows Tesla's entire progress since May 2019. As visible, the price appears to have formed a textbook five-wave impulse pattern, labeled 1-2-3-4-5. It certainly has been a wonder to behold while it lasted. The problem is the Elliott Wave theory states a three-wave correction follows every impulse.

Normally, the corrective phase of the cycle would erase the entire fifth wave. For Tesla , this means a sell-off to the support of wave 4 near $327.

The Moving Average indicator reinforces that the price is overextended. If this count is correct, the next couple of weeks can be a lot different than the past two months.

What's your view on Tesla Stock?


your strategy is fault, tesla go higher and higher...........:(
Veejahbee MartinSchnellmann
@MartinSchnellmann, I don't have to be right always. Thanks for your comment.
your chartr not working lol
Veejahbee MJoffee
@MJoffee, Yes, I don't have to be right always.
Could you do an Elliot wave analysis on MACd MasterCard and Visa for the past 10 years? I see 0 pullbacks
Veejahbee, I will have a look.
Great insights
Veejahbee jenyapelican
@jenyapelican, Thank You
Very good description and transparent
Veejahbee MartinSchnellmann
@MartinSchnellmann, Appreciate it.
+1 Reply
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