Tesla (TSLA): Trend Reversal or Just a Blip?

Jun 13

Today, we are analyzing Tesla on the daily chart. After surviving the stronger sell-off at the 78.6% retracement level and avoiding the stop loss, we have witnessed a bullish divergence, which led to a significant upward push.

Starting from the end of Wave (1), Tesla left this wave with a breakout gap downward. This breakout gap has not been closed yet, and we continuously saw lower lows and lower highs, indicating a clear downtrend. Recently, the first higher high has formed, which is a strong indication of a trend reversal.

We believe Tesla might trade back towards the breakout gap, potentially testing it briefly before moving upwards towards the Point of Control. Between the levels of $190 and $230, trading volume has been low, and we don't expect this to change significantly. Therefore, a quick rise to around $260 is possible.

The key question now is whether the breakout gap will be tested. We maintain our view that Wave (2) concluded at approximately $139, and we should be on the way up. If the price falls below $139, a quick retrace to around $100 is likely.