TSLA is setting up for a really big move; up or down. Let's take a look:
Bull case:
Assume Primary wave 2 of cycle wave 3 completed Back in January of 2023. It was more than 75% drawdown lasted for more than a year, pretty much in line with a larger degree wave 2. It should be on its way to wave 3 on minute degree of wave 1 of minor of wave 1 of Intermediate of wave 1 of primary of wave 3 of Cycle degree. If this is the case, we should see some very crazy price action for the next few years. We are already seeing pullbacks are getting smaller and quicker. Tesla has a tendency to stay sideways and then push to the moon. So, if it is in the major bull cycle, then the sideways action should get smaller over time and upward action should intensify. We should see a breach of $300 and $400 within a few months and should not revisit higher $200 levels again. By mid next year we should see all-time highs.
Bear case:
It will assume primary wave 2 of cycle wave 3 is not over yet. Markets everywhere are very frothy, and we cannot discount that a recession is going to unavoidable next year. If that is the case, then expecting a raging bull market for Tesla will be unrealistic. All business lines of the company are very sensitive to economic downturns. If that is the case then July top of 2023 would be the local top for now and price should head back to double digits over the next few years. If price goes below $45, then the chance of even a bigger downturn could be possible. Might have to re-evaluate the structure and call 2021 top as cycle degree wave 1 and a very, very long and deep wave 2 lasting years. We are not anywhere close to that scenario, so it will be an alternate to an alternate for now.
What to look for:
At the moment I am looking for a pullback to correct the rally from October. Maybe close the gap at $223. $196 is a must hold. So, I will start to enter at $230-$220 and will place stop loss at $194. It is a wide stop loss, but I am ok with that risk. Will have some short options to make the trade delta neutral. In the next 2 weeks we will see how things play out.
Bull case:
Assume Primary wave 2 of cycle wave 3 completed Back in January of 2023. It was more than 75% drawdown lasted for more than a year, pretty much in line with a larger degree wave 2. It should be on its way to wave 3 on minute degree of wave 1 of minor of wave 1 of Intermediate of wave 1 of primary of wave 3 of Cycle degree. If this is the case, we should see some very crazy price action for the next few years. We are already seeing pullbacks are getting smaller and quicker. Tesla has a tendency to stay sideways and then push to the moon. So, if it is in the major bull cycle, then the sideways action should get smaller over time and upward action should intensify. We should see a breach of $300 and $400 within a few months and should not revisit higher $200 levels again. By mid next year we should see all-time highs.
Bear case:
It will assume primary wave 2 of cycle wave 3 is not over yet. Markets everywhere are very frothy, and we cannot discount that a recession is going to unavoidable next year. If that is the case, then expecting a raging bull market for Tesla will be unrealistic. All business lines of the company are very sensitive to economic downturns. If that is the case then July top of 2023 would be the local top for now and price should head back to double digits over the next few years. If price goes below $45, then the chance of even a bigger downturn could be possible. Might have to re-evaluate the structure and call 2021 top as cycle degree wave 1 and a very, very long and deep wave 2 lasting years. We are not anywhere close to that scenario, so it will be an alternate to an alternate for now.
What to look for:
At the moment I am looking for a pullback to correct the rally from October. Maybe close the gap at $223. $196 is a must hold. So, I will start to enter at $230-$220 and will place stop loss at $194. It is a wide stop loss, but I am ok with that risk. Will have some short options to make the trade delta neutral. In the next 2 weeks we will see how things play out.
