Tesla – Long Term Forecast
TSLA may be setting up for a significant move that few market participants expect. Let’s step back, review the chart from a broader perspective, and update the long-term outlook.
Tesla is approaching the September monthly closure with several very concerning technical signals, and it’s time to evaluate the prospective paths on the all-time scale.
ELLIOTT WAVE
This is the all-time chart as I saw it at the beginning of the year.
Following the forecast, Tesla took a deep dive and then staged a sizable rally. My main concern is that the rally appears corrective. Here is the updated chart—let’s discuss each potential scenario.
Preamble:
The current wave up has been corrective. It includes a triangle that overlaps a possible wave 1, so it cannot be wave 4. The last three large rallies (circled) have also been corrective.
Green:
The only bullish scenario I would accept is a possible leading diagonal that began in January 2023—which would require Tesla to make a new ATH. The current wave could only be wave I of (III); it cannot be wave (III), as third waves cannot be diagonals under Elliott. While this appears bullish at first glance, the eventual outcome could be worse than the bearish scenarios below: after a diagonal completes, price often returns to its point of origin. In this case, that would be the January 2023 low near $100.
At this point, the blue and red scenarios have better odds.
Red:
The current wave could be wave (x) of B within an even larger (B). This structure aligns with the guideline of increasing complexity in corrective waves.
Blue:
The current wave could be B of (Y) of (II). This would fit EW guidelines if wave C develops as an Ending Diagonal over several quarters or longer.
Both blue and red will be greatly reduced in probability if TSLA makes a new ATH.
SUMMARY
TSLA may be close to a significant decline. If it follows the red or blue paths, a 50% loss would be quite normal. Paradoxically, making a new ATH could set up an even larger decline—on the order of 70% off the peak.
Some signals are still developing, and there is no strong reversal pattern yet. Still, the technicals, especially on larger frames, are setting up for a major short opportunity. The monthly closure could bring several strong signals. Let’s be patient and keep this opportunity in mind.
Happy Trading!
