Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Tesla’s Stock Split Rally Right On Cue, According To Elliott Wave

By Dr. Arnout ter Schure Stock MarketsAug 13, 2020 01:49PM ET
www.investing.com/analysis/teslas-stock-split-rally-right-on-cue-according-to-elliott-wave-200534000
Tesla’s Stock Split Rally Right On Cue, According To Elliott Wave
By Dr. Arnout ter Schure   |  Aug 13, 2020 01:49PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Tesla (NASDAQ:TSLA) stock is “supposedly” rallying on the news of a 5-to-1 stock split. However, in my update of July 23, see here, I already answered the question “What is wrong with Tesla’s stock?” using the Elliott Wave Principle (EWP) and Technical Analyses (TA) and found:

  1. Tesla is now as overbought and correcting.
  2. Tesla should now be in (red) wave-iv before moving higher for (red) wave-v to complete the anticipated (black) “wave-3?”.
  3. Tesla [should] target ideally between $1,369-1,320 for (red) wave-iv before moving higher to new All-time Highs (ATH) for (red) wave-v of (black) wave-3.

Fast forward, and Tesla bottomed, twice, right at the upper end of the ideal target zone, before moving higher. At $1,365 on Aug. 11, and $1,366 on July 24. See Figure 1 below.

In addition, price did what I would call a flat fourth wave correction of the $1,795 all-time high made July 13. The stock retraced almost precisely 38.20% of the entire third wave (red wave-iii) rally. Both the correction pattern and the retrace level are typical for a fourth wave.

Figure 1, TSLA daily chart.

Tesla Daily Chart.
Tesla Daily Chart.

Thus, my analyses from July 23 was correct. Items 1), 2), and 3) have all be checked off. That is the power of the EWP combined with robust TA.

In fact, without knowing this “stock-split-news” on July 23, I already knew with a high degree of certainty what Tesla stock would do over the next few weeks: correct, bottom at around $1,370+/-50, and then rally. I did not need any “news” for that forecast, nor will I ever need any news to forecast the most likely price movement of any stock or index. News is simply a catalyst. For all I care about, the story could have been that Tesla developed an electric-powered yellow submarine. The stock would have rallied also. What matters are the price patterns, Fibonacci-levels, i.e., price levels and recognizing those as being ultimately important. News is noise.

So, what is next?

Recognizing I am always wrong till proven right by the market, and so far, it has proven me right, my analyses are correct as long as the Aug. 11 low at $1,365 holds. In that case, I will be looking for an ideal target of $1,900 where (red) wave-i equals the length of (red) wave-v. This is a typical relationship between 1st and 5th waves in the EWP. Since 5th waves can be shorter or longer, I set a target zone of $1,820-1910. This current wave high will then complete, ideally, a more significant 3rd wave (black wave-3), and we should see Tesla correct once again back to $1,275-1,550 for a larger wave-4, before a last wave-5 rally to new all-time highs.

But let’s not get too far ahead of ourselves, and instead focus on the current uptrend. As usual: know your trading time frame, know your pain level, and never assume anything. Hope is not a profitable strategy.

Tesla’s Stock Split Rally Right On Cue, According To Elliott Wave
 

Related Articles

Gary S. Morrow
Copart Breakout? By Gary S. Morrow - Apr 09, 2021

Copart Inc (NASDAQ:CPRT) is extending Thursday’s trendline break. This key overhead trendline links the January and February highs. With solid footing underneath we believe...

Tesla’s Stock Split Rally Right On Cue, According To Elliott Wave

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
Ram Chandan Chandan
RAMCHANDAN2019 Aug 14, 2020 8:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
U need to learn the chart
Mike Lee
Mike Lee Aug 14, 2020 8:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
check out the Tesla price, he is right so far
Jan Skilbrei
Jan Skilbrei Aug 14, 2020 2:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
one always find stocks which fit «perfect», and more that dont, bad news would have taken out the fib level and broken down, its ignorant say news dont matter
BOO DADDY
BOO DADDY Aug 13, 2020 9:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wow. So much "I was right". Must be multibillionaire that graciously writes articles for us.
Andrew carson
Andrew carson Aug 13, 2020 3:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Splits are generally done at the end of the run. Just saying..
Cristian Lazar
Cristian Lazar Aug 13, 2020 3:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So is not a good idea to buy and hold stocks or options on TSLA before the split (in the idea of a leap up the days after split)? 🤔
Dr. Arnout ter Schure
Dr. Arnout ter Schure Aug 13, 2020 3:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Do yiu have Any evidence for this statement?
Fred The Man
Fred The Man Aug 13, 2020 3:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Dr. Arnout ter Schure While it's hard to argue the true value of TSLA, the meteoric rise followed by a stock split could be reminiscent to the 2000s and companies such as Cisco splitting at the top.  It all depends on the broad market: if it can remain bullish and if the rotation out of tech into value remains insignificant the speculation can take TSLA higher.  The interesting part was that TSLA was in bearish pattern after breaking down from its bullish pennant.  One news event, the stock split, was enough to negate the down draft for TSLA.
Mike Lee
Mike Lee Aug 13, 2020 3:38PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Dr. Arnout ter Schure   you think we are going higher or will hit around $1950 then retest $1400 before the next leg up?
Large Father
Large Father Aug 13, 2020 2:00PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
American investors are really smart
Noel Amparo
Noel Amparo Aug 13, 2020 2:00PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You're being ironic, right?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email