TSLA Technical Analysis

[GoTslaGo]

Below is the 4-year Tesla (TSLA) chart ending 2017 JAN 09. The large alphanumerics indicate my suggested endpoints for Elliott waves. It’s nearly perfect, except the trough of wave 4 in the initial 5-wave sequence ideally should not have been lower than the peak of wave 1. If another wave 3 in a potential sequence of 5 has begun, there could be much further to go.

Bob Prechter’s opinion stated to me on January 17 did not appear to be given with the force of great conviction, “Not sure about the Tesla chart. The overlap between waves 1 and 4 make it suspect.”

Immediately afterward I reread that same passage you quoted from his 1978 book Elliott Wave Principle. I could see why Bob may have wavered a bit from certainty in his interpretation of one portion of the TSLA chart just as you have. Indeed, TSLA may be one of those special situations to which he alludes. There is again talk of another subsequent TSLA offering to allow for more investment in mammoth growth. That could be an example of the leverage to which Bob was referring in his book. Certainly the run-up since November appears to be an intermediate term wave three, which is usually the longest and strongest of an impulse series.

Meanwhile, Bob sent me a copy of his newly published 800-page magnum opus The Socionomic Theory of Finance with hope that I might review it. I’ve just gotten started and won’t be able to form a complete opinion until finished. It starts out interestingly with noteworthy examples demonstrating that news is not much of a driving factor in share prices.

So I went back after thinking about the Elliot Waves and reviewed some of the books and rules. I redrew the TSLA chart with the main wave designations without violating the wave 4 rule. I think we may have "rushed" the wave (so to speak) and I think this is what maybe going on:



So the first wave ended with the ATH of around 291 or so (Sept 14). Wave 2 ended with the low around 141 (Feb 2016). The first peak up to 269 (April 2016) was a subwave starting Wave 3. This would be compatible with the Elliot Wave rules. Basically we are at the beginning of the subwaves of Wave 3 (the longest wave). Thus when Wave 4 (down-wave) comes, for it to not violate the rules it will never drop below 291. Wow.

Edit: Please correct me if my understanding is wrong, Thanks!

 

[GoTslaGo]

Meanwhile, Bob sent me a copy of his newly published 800-page magnum opus The Socionomic Theory of Finance with hope that I might review it. I’ve just gotten started and won’t be able to form a complete opinion until finished. It starts out interestingly with noteworthy examples demonstrating that news is not much of a driving factor in share prices.

I've always had this feeling about SP movements. Explanations of SP movements with the news of the day often seemed arbitrary and kind of groping around for an answer...IMHO.

 

[jesselivenomore]

Curious did you end up loading up at 270?

I ended up adding at 255 when we broke the flag. I am currently more concentrated in one stock than I've ever been before, considering my long term and short term exposure. 235 is still the key spot to hold on any pullback, I would have to reevaluate my position if that's broken. Short term we are now outside the daily bollinger bands which usually means pause/pullback(sometimes even top), but again with the short interest things can get whacky.

 

[Bgarret]

I ended up adding at 255 when we broke the flag. I am currently more concentrated in one stock than I've ever been before, considering my long term and short term exposure. 235 is still the key spot to hold on any pullback, I would have to reevaluate my position if that's broken. Short term we are now outside the daily bollinger bands which usually means pause/pullback(sometimes even top), but again with the short interest things can get whacky.

Hearing different interpretations about closing so far above the Bolingbrook Band...is it bullish or cautious signal?

 

[Gerasimental]

Hearing different interpretations about closing so far above the Bolingbrook Band...is it bullish or cautious signal?

Could be either. We'll know which it was after the stock price has moved (not not moved)!

 

[Jonathan Hewitt]

Hearing different interpretations about closing so far above the Bolingbrook Band...is it bullish or cautious signal?

Normally cautious but can be bullish if it's a BB breakout.

"Breakouts above the upper band while the bands are contracting should also be confirmed by volume and some positive news such as a strong earnings report or developments that imply earnings growth in the near future. Expanding volume on a breakout is a sign traders are voting with their money that the breakout will continue."

Read more: How do traders use Bollinger Bands® to identify a breakout? | Investopedia How do traders use Bollinger Bands® to identify a breakout?

 

[jesselivenomore]

Hearing different interpretations about closing so far above the Bolingbrook Band...is it bullish or cautious signal?

After an extended run its cautious. At the beginning of a move its bullish.

Big caveat, short covering can render normal technicals meaningless. In 2013 we were above BB for multiple days but didn't matter because people were forced to buy. Not sure if we are at that point yet, maybe above ATHs.

 

[austinEV]

Hah. Just trading above the BB, no big deal

 

[Curt Renz]

So I went back after thinking about the Elliot Waves and reviewed some of the books and rules. I redrew the TSLA chart with the main wave designations without violating the wave 4 rule. I think we may have "rushed" the wave (so to speak) and I think this is what maybe going on:

View attachment 214691

So the first wave ended with the ATH of around 291 or so (Sept 14). Wave 2 ended with the low around 141 (Feb 2016). The first peak up to 269 (April 2016) was a subwave starting Wave 3. This would be compatible with the Elliot Wave rules. Basically we are at the beginning of the subwaves of Wave 3 (the longest wave). Thus when Wave 4 (down-wave) comes, for it to not violate the rules it will never drop below 291. Wow.

Edit: Please correct me if my understanding is wrong, Thanks!

You may be right.

Frost and Prechter state in chapter 1 of Elliott Wave Principle, "Wave 3, moreover, always travels beyond the end of wave 1."

The 2017 TSLA share price is not there yet, but it could be quite soon.

 

[Curt Renz]

I've always had this feeling about SP movements. Explanations of SP movements with the news of the day often seemed arbitrary and kind of groping around for an answer...IMHO.

Indeed, that was a problem my colleagues had when I worked in TV financial news. Producers and writers would often ask me for the reasons for a day’s moves in the popular market averages. I regularly tried explain that they were related to the outlooks, intuitions and moods of market participants as we can try to determine through technical analysis, but my colleagues wrote news related explanations anyway.

After I retired I continued my daily market commentaries on my website. At first they were almost exclusively related to technical analysis, as readers of my book and my publisher expected. Nevertheless, a number of my visitors requested that I include a condensation of the day’s financial news. So as a service to them I began relaying the day’s macroeconomic reports at the top of my stock market webpage, but with few news related comments of my own.

 

[austinEV]

Kind of a shooting star today right?

 

[geneclean55]

Kind of a shooting star today right?

Not seeing a volume climax today that often signals reversal. We have had a couple of these shooting stars in the past few months that didn't change the upward trend. Be interesting to see tomorrow mornings action.

 

[jesselivenomore]

Kind of a shooting star today right?

Yup. Bought some protection at the close. Should rest a little bit and get back inside the BB. Doubt we break ATH before earnings.

 

[geneclean55]

What would negate the shooting star set-up from yesterday? A close above 280.98?

 

[AlMc]

How to Play Tesla's Wild Ride

Interesting for TA friends

 

[jesselivenomore]

What would negate the shooting star set-up from yesterday? A close above 280.98?

Need a close below 275 to confirm shooting star. Anything above is neutral to bullish.

 

[jesselivenomore]

Yup. Bought some protection at the close. Should rest a little bit and get back inside the BB. Doubt we break ATH before earnings.

259-263 is a big spot to hold in the short term(gap fill + prior high). I will be looking to take off the protection I bought if we can reverse off of there and preferably end green. If not, probably will keep protection til earnings.

 

[Wenche]

The Chart Guys
I have followed The Chart Guys for a while. Seems he has some insight. Start to look at the videos one week back. Skip to about 4.50 for TSLA. What do you think @Curt Renz ?

 

[Lump]

Chart readers, when does $280 become really worrisome?

 

[austinEV]

Chart readers, when does $280 become really worrisome?
View attachment 216061

The first 3 times... The fourth time will cross and not look back.

Assuming that it was a local top again, which seems most likely at this point, we go down and find some new support level. 250's seem likely to me. Then there is some run up or news in a few months and we say good bye to the 200's.