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Was $780 All Tesla’s Dead-Cat Bounce Wrote?

By Dr. Arnout ter Schure Stock MarketsApr 19, 2021 03:37PM ET
www.investing.com/analysis/was-780-all-teslas-deadcat-bounce-wrote-200573975
Was $780 All Tesla’s Dead-Cat Bounce Wrote?
By Dr. Arnout ter Schure   |  Apr 19, 2021 03:37PM ET
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A month ago, I was looking for a bounce in Tesla (NASDAQ:TSLA) stock to ideally $825+/-25, fined tuned to $815.

Last week, on April 14, TSLA topped at $780. Was that all she wrote? Was my forecast off by 2.5 to 4.3%? It sure could be so because my margin of error is +/-5%, as no method, not even the Elliott Wave Principle (EWP), can ever be always 100% accurate and exact.

What matters is that using the EWP, I forecasted rather accurately where many prior 4th waves and the recent (red) b-wave would bottom. See the “callouts” in Figure 1 in red and black below. That is why we know the method is reliable, and we should expect it to continue to deliver accordingly.

Figure 1: TSLA daily candlestick chart with EWP Count and Technical Indicators:

Tesla Daily Chart.
Tesla Daily Chart.

The critical question is, as usual in the financial markets, what is next?

Currently, TSLA is right at important Simple Moving Averages (SMA) support, as it is still holding the 10-day, 20-day and 50-day SMA ($711, $680, $705; respectively). If it can keep these SMAs as support, it still has a shot at moving closer, i.e., inside the ideal (red) c-wave target zone because it just fell a little shy of it last week. Besides, the rally since the $539 low made on March 5, labelled as major (black) wave-a, still counts best as only three waves up, after five waves decline. Thus, it is still to be considered a counter-trend rally. The red and green dotted arrows show TSLA reached ideal c=a extensions last week at two different wave degrees: red intermediate and green minor. Thus, technically the “dead-cat” bounce can be complete.

A daily close below the recent (green) minor-b wave low at $668 made on April 8 will be the first severe warning for 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. Conversely, TSLA bulls need to rally the price back above last week’s high to target the $825+/-25 zone.

Bottom Line: The anticipated, detailed EWP count shared over the last several updates has unfolded well. Last week, TSLA fell marginally short of the ideal dead-cat bounce upside target. Still, if it was indeed only a counter-trend rally, it should not be too surprising because “in bear markets upside disappoints and downside surprises.” If TSLA remains below $780, I now prefer to look lower to ideally $450+/-25. From there, I expect a sizeable multi-month rally to new all-time highs.

Was $780 All Tesla’s Dead-Cat Bounce Wrote?
 

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Was $780 All Tesla’s Dead-Cat Bounce Wrote?

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Comments (4)
Việt Ông Văn
Việt Ông Văn Apr 22, 2021 3:57AM ET
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Tesla is on it path to 1000
neel sheth
neel sheth Apr 20, 2021 7:26AM ET
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Tesla to touch 850 before earnings..
Ron Love
Ron Love Apr 19, 2021 9:19PM ET
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This stock trades on headlines and Elon Musk Tweets, not technicals.
Larry Deangelis
Larry Deangelis Apr 19, 2021 4:51PM ET
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Tesla first took out the low of 624 before rallying. I believe you said it had to hold that low.
Dr. Arnout ter Schure
Dr. Arnout ter Schure Apr 19, 2021 4:51PM ET
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Hi, thanks but please note that 4 weeks ago I found "Thus, as long as $600 holds, which is the lower end of the red wave-b target zone, and ideally today’s low hold, I expect the next move higher towards $800-825 to get going soon, targeting $815 ideally. Once this red intermediate wave-c of black major-b completes, I expect the next leg lower: wave-c of blue Primary-IV to ideally $450+/-25."  So far so good as $600 held on a closing basis. Intra-day it went to as low as $591... pardon my $9 (1.5%) inaccuracy...  Besides, 6 weeks ago I wrote "The three waves up are currently in progress, and the first wave has likely completed (red wave-a). The second wave is now underway (red wave-b) to ideally $625+/-25, from where the next move higher (red wave-c) should kick into ideally $825+/-25 for a typical wave-C=wave-A relationship"  Again, pardon my inaccuracy as we got $591 and not $600... I honestly don't think there's a method that can forecast this precisely.
 
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