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:
- Tesla is now as overbought and correcting.
- Tesla should now be in (red) wave-iv before moving higher for (red) wave-v to complete the anticipated (black) “wave-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.