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Tesla Still Heading To Low $400s

By Dr. Arnout ter Schure Stock MarketsMay 13, 2021 03:24PM ET
www.investing.com/analysis/tesla-still-heading-to-low-400s-200579948
Tesla Still Heading To Low $400s
By Dr. Arnout ter Schure   |  May 13, 2021 03:24PM ET
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Back in January, using the Elliott Wave Principle (EWP) and technical analyses, I looking for a more significant correction to unfold in Tesla (NASDAQ:TSLA) shares.

As stated then:

A correction of the primary-degree is a large one, in both time and price, and suggests TLSA should see between $560-600 before primary-V to new all-time highs kicks in. These all-time highs should be in the $1,200-$1,500 region. It is even possible for TSLA to fall back to September-November 2020 levels ($400+/-50). But for now, I find that less likely and will stick to the standard 23.60-38.2% retrace for a 4th wave, just like I showed on the daily chart it has adhered to many times.”

In the subsequent three updates after that, I have kept you abreast of the price movements since. My forecasts were for “a drop to around ~$575, rally to around $800-825, followed by a final drop to $450+/-25.” Reality gave us a drop to $537, a rally to $780 and now TSLA is trading at $575. My predictions were relatively accurate.

Nonetheless, this shows the difference between objective analyses of the price charts and a thorough understanding of what moves stock prices and subjective opinions. For example, I could not care less if Tesla (temporarily) halts its car sales made with Bitcoin. I find Elon Musk’s reasoning hypocritical, but that is an opinion that has no place here. The “why” is immaterial. The charts tell you all you need to know.

Figure 1. TSLA daily and weekly candlestick charts with EWP Count and Technical Indicators:

Tesla Daily And Weekly Charts.
Tesla Daily And Weekly Charts.

In my previous update, I found:

A daily close below the recent (green) minor-b wave low at $668 made on April 8 will be the first severe warning for the TLSA bulls that the stock is on its way down to the ideal $450+/-25 zone. Full confirmation of this path lower will be achieved on a daily close below the (red) intermediate-a wave low at $591 made on March 30.

Fast forward, and TSLA has just done these two “cardinal sins,” as it is currently trading at $575.

TSLA is currently struggling with its 200-day simple moving average. See Figure 1A above. If it cannot hold it, then based on simple symmetry (orange arrows), it can drop to as low as $400, right in the horizontal support zone. For now, all the technical indicators (FSTO, MACD, RSI, MFI) are pointing down and are on a sell, both on the daily and weekly timeframe. Thus, the charts are weak and tell me to continue to look lower.

Bottom line: With a few more twists and turns along the way, I expect $450 +/- 25 to be reached before the last more significant (blue) Primary-V wave to ideally around $1,200+/-100 takes hold (See Figure 1B). Hence, the risk/reward is starting to favor the reward side more and more (25% risk vs. 200% reward), but there are no signs of a meaningful bottom being put in place just yet. Patience is, as usual, prudent. TSLA’s share price will have to rally back above $700 from current levels to prove my thesis wrong.

Tesla Still Heading To Low $400s
 

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Tesla Still Heading To Low $400s

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Comments (10)
Andrew Bevan
Andrew Bevan May 14, 2021 12:09PM ET
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I'm trying a short on the indexes (ETN). Timing is still a challenge, and those bounces are wild. Still, we'll see. 👍
Делчо Делов
Делчо Делов May 14, 2021 5:40AM ET
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Great analysis once again. Thanks. Could you share any ideas about Chinese giants- Alibaba, Baidu, Tencent, JD, Pinduoduo?
Ari M Eden
Ari M Eden May 14, 2021 1:13AM ET
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As long as it heads up to your target afterwards I can live with that.  I have a strong stomach.
Gene Kret
Gene Kret May 13, 2021 10:55PM ET
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Hey Arnout who the heck is your editor? You and your editor should be fired immeadiately!! Your *******hocus pocus is garbage and everyone knows it!
Honest Review
Honest Review May 13, 2021 10:55PM ET
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someone is salty they are losing money
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 13, 2021 10:55PM ET
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Derek Marcks
Derek Marcks May 13, 2021 10:38PM ET
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So, TSLA trading in the $425 - $1,300 range. Quite the prediction. I predict the weather in NYC over the next 3 months to be between 42°f - 130°f. I'll come back in 3 months to pay myself on the back for my accurate prediction.
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 13, 2021 10:38PM ET
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nope, that is not what I said. $425 first before $1300. Quite a different story, it's about the path, not the range...
CHAD TENDIES
CHAD TENDIES May 13, 2021 8:54PM ET
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Heading much lower. My price target is $50
Gene Kret
Gene Kret May 13, 2021 8:54PM ET
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Chad you need to go take a basic economics class because you are lacking smarts.
Patrick Toppins
PTop264 May 13, 2021 8:33PM ET
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Hiw about a chart on hiw many times youve been wrong? Whats the worthless elliot wave predict there?
Don Getty
Don Getty May 13, 2021 5:18PM ET
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expect Tesla to fall below 100 - PE is still way too high especially with every major car company jumping electric - tesla simply has no major advantage over the competition and the major disadvantage of Musk and runaway ego
Jan Arnoldus
Jan Arnoldus May 13, 2021 4:05PM ET
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great analysis. Please chart one on NIO. I promise that I will listen this time.
Andrew Bevan
Andrew Bevan May 13, 2021 3:28PM ET
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Congratulations upon your 100th article and thank you for sharing. 👍
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 13, 2021 3:28PM ET
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thank you!
Baris Duzalan
Baris Duzalan May 13, 2021 3:28PM ET
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Tesla is headed back up to 680. We'll see who knows this business better Dr.
Louis Lipps
Louis Lipps May 13, 2021 3:28PM ET
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Baris Duzalan  I'm a novice simpleton charter and even I see TSLA looks like it's going much lower.  For starters on the daily it's sitting right on the 200 day but on the daily it's right above the 50.  If it breaks those it's a heck of a long way down to the 200 on the daily chart.  MACD's both look horrible too.
Dr. Arnout ter Schure
Dr. Arnout ter Schure May 13, 2021 3:28PM ET
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Baris Duzalan  that's fine if it does. As I said "With a few more twists and turns along the way"... It is impossible to know and foresee each and every twist and turn. Thus, my question is: "What happens after it reaches $680?" If you can tell us that, that be great to know, and where one's real forecasting accuracy and power lies. Everyone can nail a turn, few can nail turns consistently. That is what separates the men from the boys, the amateurs from the pros, the commenters from the authors.
 
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