Tesla (TSLA) Eyeing Lower Levels?

Higher Timeframe Price Action Signals Lower Prices

Based on the monthly timeframe’s price action, Tesla (TSLA) touched gloves with an ‘alternate’ AB=CD bearish formation in July, denoted by a 1.272% Fibonacci projection ratio at $298.55, a level complemented by a 200.00% extension derived from the B-C retracement at $287.39. Technically, harmonic traders tend to plot downside support targets out of this formation through the 38.2% and 61.8% Fibonacci retracement ratios resulting from legs A-D, which, in this case, reside at $224.26 and $177.95, respectively.

From the daily timeframe, the recent downside move from the monthly structure appears poised to pencil in an equal AB=CD bullish formation at $227.80, depicted by a 100% projection ratio that is accompanied by a 50.0% retracement ratio at $227.26, a 38.2% Fibonacci retracement ratio at $224.61 and horizontal support at $234.22. In addition to this, assuming the stock continues to underperform from current prices, we could also see the daily chart’s Relative Strength Index (RSI) dip into oversold territory (currently trading south of its 50.00 centreline [negative momentum]).

H1 Support at $244.94 Echoes a Vulnerable Tone

Across the page on the H1 timeframe, shorter-term price movement retested the lower side of resistance at $250.07 in recent hours and, for now at least, is holding firm. This follows Monday’s rebound from support nearby at $244.94.

In view of the monthly and daily charts exhibiting scope to explore deeper water until at least daily support from $234.22, H1 resistance from $250.07 may remain a technical ceiling and eventually persuade sellers to commit and elbow price beneath H1 support at $244.94. A decisive H1 close beneath the aforementioned level opens the gates for a run to as far south as H1 support at $234.05, conveniently aligning with daily support coming in at $234.22. Alternatively, a break north of current H1 resistance exposes H1 resistance at $254.50 and, thus, could also be an area that this market witnesses sellers make a show from seeking a sell-on-rally setup, in line with the overall picture’s present direction.

Charts: TradingView

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