I still believe that my current read of the TSLA bigger price structure is correct and I am looking to get on the books another short position going into year-end. Here is my read of the charts …
TSLA Weekly Chart
As I have stated in my other blog postings regarding TSLA, I believe that the current upward trend has completed an important top and is in fact, beginning a pull-back that may even turn out to be a new trend lower.
As you can see on the above weekly chart, price has broken below the median price line and more-or-less hung the recent price range which sees price hugging the underside of the median line. You will often see that type of price action when price breaks a support level – it hangs around that important median line but is never able to get back above those levels. In the end, buyers give-up on the stock and price begins heading lower. Where do I see price going? Well, for sure I think it is going to at least get to the lower support level/line of the broadening price pattern as seen on the following daily chart.
TSLA Daily Chart #1
So depending which side of the TSLA trade you find yourself, you are either looking at this recent price consolidation as support before we blast higher and make new all-time highs. Or if price is just in the process of completing a bear-flag and is soon going to be headed lower.
I think that big institutional holders of TSLA do not want the stock to head lower before year-end as it could mess with their 2017 portfolio performance. Wall Street bankers are salivating at the prospect of the $1 billion+ equity/debt underwriting fees that are sure to come early with the need for more financing at TSLA.
I think despite all of the above support, TSLA will sometime over the next 6 weeks, make a minor push higher here before beginning the bigger time frame’s 2nd wave lower.
TSLA Daily Chart #2
Price will often push up to take out the stops that exist by all of the bears that are trying to short TSLA during the past couple of weeks. Once mother market has infected the most pain on the maximum number of market participants, the second wave lower will begin.
Ideally, I want to get my short in place during the next little while at levels just above the last pivot high of $326.67. If we are making a 3-wave price structure lower, then we will for sure be going down to the 1.618x price extension of Wave 1 … that has price going down to my $233-$235 price target, which will also be right around the lower price line on the broadening price pattern.
After the bulls salivating over the great opportunity to buy TSLA at such a low price, they will eventually get overwhelmed by additional sellers and price will make its last Wave 3 move down into a more tradeable low price level of support. I am looking for that zone to be around $200 – $210/share. The $200 level is a nice big round number which the market will often like to go to before finding final support/resistance levels.
Bottom Line – TSLA looks like it is setting up to be one of my bigger stories for 2018.
Cheers … Leaf_West