After making some tremendous gains last year and capping off what appears to be a lucrative primary impulse wave pattern from July 2019, TSLA appears to have started 2021 with a corrective primary wave. Based on the 5-wave pattern from January to the beginning of March, it appears that this bearish primary wave is a zigzag (bearing in mind that the sub waves for a zigzag are usually 5-3-5). The past month appears to be the B-wave of this zigzag consisting of a flat. Based on the past few days, it looks like it’s pivoting into the last segment of the zigzag which I expect to be another 5-wave downward impulse. The last time TSLA was in a corrective primary wave, the wave took on a complex meandering triple-three pattern. Assuming that the guideline for alternating corrective waves is in effect, we can expect a fast and deep correction here. Retracing the price at the 61.8% level compared to the last primary wave could land us at a price of $365 sometime this Summer.
On a fundamental level, a deep correction like this appears to be a bit unexpected. The company has built a few new factories, is increasing deliveries, and appears to be the center of an emerging EV industry. However this expansion has strained the company’s talent. Factories like Fremont have been having production issues and Elon Musk can only be at one location at a time. While Musk can certainly sing a pleasant song about making a million deliveries, it’s not too hard to see that they’re still missing their production potential with all their new factory floor space. Hopefully these production issues will resolve shortly and TSLA will resume its upward trend.
On a fundamental level, a deep correction like this appears to be a bit unexpected. The company has built a few new factories, is increasing deliveries, and appears to be the center of an emerging EV industry. However this expansion has strained the company’s talent. Factories like Fremont have been having production issues and Elon Musk can only be at one location at a time. While Musk can certainly sing a pleasant song about making a million deliveries, it’s not too hard to see that they’re still missing their production potential with all their new factory floor space. Hopefully these production issues will resolve shortly and TSLA will resume its upward trend.