We’ve been tracking TSLA intensely since the major 4 low, and now that it has clearly put in a top, the question arises if the recent top was all of major 5 and thus Primary I, or if it only was intermediate i of major 5? However, we’ve also had our intermediate ii retrace target zone in place for some time and price has now reached within this zone, but no clear reversal yet and although the c-wave down has reached the c=a extension it appears to be missing a few waves; an additional b-wave up and c-wave down. Also given the more pronounced waves in the preceding a- and b-wave. With the more common 1.382x and 1.618x extensions targeting the 61.8% retrace of all of “i or III?” at $225ish and the purple horizontal long term S/R line at $216, respectively I expect lower prices in the days ahead, after a possible (b-wave) bounce. CONTINUED BELOW CHART
Also the weekly chart suggests further downside is ahead. Namely, the weekly RSI5 is pointing down and hasn’t reached oversold yet, whereas during prior corrections the RSI5 did reach oversold (<20) levels: see red circles. Hence, the RSI5 -and thus price- can drop more. In addition, the A.I. and FSTO are both firmly pointing down and haven’t reached oversold levels either, while the MACD is about to give a sell-cross over. What favors the primary I top is the negative divergence on the MACD. The first MACD high in october 2013 coincides with a minor 3 top, then the next lower MACD high in March 2014 coincides with an intermediate iii top, the 3rd and lower MACD high September 2014 coincides with a major 3 top, and the last and lowest MACD high with a major 5 top. CONTINUED BELOW CHART
Hence, for now it is prudent to be patient. I see no real reason to jump back into TSLA and instead would like to see a clear buy signal on the weekly from oversold levels first. If that is then major b of Primary II or intermediate iii of major 5 of I we’ll determine then, but regardless it will be a profitable long trade IMHO. For now, I am watching.