It's foolish to say "100% certain" about anything but if TSLA cannot break back up into the channel from below then I give it a full 90% chance that it will collapse in a dramatic way, and soon. Why? Because after 5 big waves up (with the ending diagonal following an exponential 3rd wave so that the wave count is pretty darned high confidence), we have the breakdown and now the back test. Here's a better view of it. That back test from below better break through into the channel again or else the stock will likely be cut nearly in half as that ending diagonal (leverage pumped to the moon) unwinds and deflates.
I think that the 1st wave down has begun and also that wave 2 back up is nearly done. Guess what that leaves next in line. That's right, a big fat 3rd wave down. that will likely have a big gap down in it (AKA cliff diving). I like Tesla cars but I would not be anywhere near this stock when it collapses and that collapse looks like it could be imminent.
A break back up into the channel would be the short seller's sign to have caution. My biggest wonder will be if TSLA collapses on its own or if the entire over bloated market gets creamed. Neither would surprise me but when I see a woman driving around with her car near the capital until the cops shoot her followed the next day by a case of self immolation in DC I start to wonder if the pressure of the con isn't getting to the marginal players in society. As Gerald Celente likes to say, when people lose everything and feel they have nothing else to lose, they "lose" it. When the herd sees crazy things going on, it is more likely to react to anything in a more volatile way.
It always amazes me what triggers the change in trends. In Tesla's case, it was one car which caught fire after an accident (v. http://abcn.ws/16OGzkA ). No one was harmed, thank God. Yet, the general mood led to a mediatic feathers and pitchforks, with a parallel in TSLA share prices.
ReplyDeleteEvidently, it's nothing new that a car caught fire after an accident. Many gas-powered cars suffer the same fate. Yet, the share prices of their makers go unscathed. Moreover, when a Prius caught fire, caused a home to explode injuring its occupant (v. http://cbsloc.al/1e4LaOV ), Toyota shares marched on without a hiccup.
For sure, fire departments have had a decade to learn how to put out fires in automotive battery packs, be they LiIon or NiMH. There are hundreds of thousands Toyota and Ford hybrid cars with huge, tricky battery packs out there. So, why Tesla?
After over a decade of being around, everyone takes hybrid cars for granted, so they have ceased to grab the attention of the population and its moods. Now, an EV like the Tesla, as many novelties, end up focusing the population mood, much like Apple has been doing, so that they end up being victims of their own popularity.
That's also why popular companies like
APPL and TSLA are good bellwethers of population mood at this moment. Where the latter goes, so likely goes the formers and everything else.
There: http://yhoo.it/HIf4gg So, though Tesla shipped 10% more cars than it itself expected, analysts expected more, for whatever no better reason than their bein gin the mood. Therefore, TSLA was whacked like a mole!
ReplyDeleteYep, got whacked in the after hours trading. As you can see, stock prices have little to do with any real valuation. They trade with the mood of the herd. Elliott waves did a pretty fair job of pointing it out this time IMO. I'll write a follow up post later to see what the count looks like but the AH was a 3rd wave whacking.
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