Member Request: A Detailed Look at $TSLA

A member has requested an examination of $TSLA. There are many technical observations I would like to point out.

Stocks such as this are totally at the mercy of a liquidity-driven market, and for the time being at least, liquidity is fleeing. That said, for all we know, the Fed may respond dovishly to the events in Europe, driving liquidity back into the system. And if so, there are many names such as this one that can resume strength. Let’s look at the chart.

There are many observations I would like to make:

  1. I have long suspected that $TSLA is somewhere in its cycle (yellow) 3/4/5 cluster.
  2. I lean to the view that it is in the 3/4. One reason for that is the move from the March 2021 low to the all-time high. It does not have the appearance of an impulse wave.
  3. If that move is a “correction,” then—since it made a new all-time high—it is likely in a huge “flat” for cycle (yellow) 4.
  4. If that is true, then we should be in the primary (pink) “C” of that 3-wave move.
  5. If this is a 4, the low made at the end of February 2022 reached an appropriate level for a wave of that degree
  6. And since there are now 3 distinct lows, we may count the structure off the all-time high as an ending diagonal (the 5-wave count in orange)
  7. If all of that is true, then so long as it stays above about $772, we may expect that it has begun a new impulsive structure to the upside.

TSLA

However, if the markets remain weak, we may also note that it is very common for wave fours to challenge the channels made from their respective wave ones, twos and threes. And that has yet to be done. If a channel challenge is needed, the diagonal I believe we are in now may be expended:

TSLA

One disadvantage of this view is that it would then make cycle (yellow) 4 very deep for a 4, taking it beneath even the 50% retracement from its high, whereas 38.2% is far more common.

So, that’s what I’m seeing here for the time being: it is possible—if liquidity returns to the market in force—for a major low to be in; and on the other hand, if the market remains weak for a bit longer, this may need to find buyers in the 500s. In either case, I am not confident that an all-time high is yet in place. The move off the high looks almost certainly corrective in nature, and so I will interpret it that way until something else develops.


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