In this recent Seeking Alpha article, the author opines the recent collapse of TSLA shares. He goes on and on about how people are panicking and how they misunderstand the fundamentals of the company, blah blah blah. If only he had read my blog he would have known well in advance that this highly probably pullback was already baked into the charts.
Today's move up in the shares was anticipated as well by my last post on this stock in which I indicated that I expected a 4th wave to be forming (sucker's rally). Needless to say, I think there will be a good deal more "panic" all the way back to the 61.8% fib before these shares are safe to look at again.
Does that preclude the possibility that the recent pullback to the 38.2 fib was the full pullback and that now the shares will rocket up into a 3rd wave? Of course not. That could happen. But my read of the wave count does not support that outcome. Not yet at least. I could be reading the pattern incorrectly. I could be missing something subtle. Never say never. But I think the odds that the recent pullback was the full retracement are very low. I give it 20% chance. For now, I am sticking with 80% chance that this is only A of C forming and that the target price for the full pullback will eventually be $90.
Note: current price of the shares is $144. If you tell any Tesla gambler today that the shares will be $90 within a few months based on some mumbo jumbo read of the chicken bones, they will laugh in your face and tell you about the strong fundamentals, how the company is changing the world, etc. All of those things might be true but nothing goes straight up or straight down and I don't think it's going to be different this time. Right now we have a few unimportant people complaining about the pullback. Talk to me again when major news media start declaring the company a bubble, etc. That will likely coincide with the 61.8% fib. That's when I would want to reconsider this stock for a portfolio pick. Again, they might beat the odds OR I might have the odds wrong. Time will tell.
Monday, November 11, 2013
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