Beginning a Bearish Arc Lower for Tesla TSLA

Aug 29, 2016: 12:39 PM CST

Is Tesla (TSLA) about to fall off the cliff and plunge lower, completing another “Arc” Pattern?

It sure looks that way today.

Let’s chart the pattern and plan the price pathways if this pattern succeeds or fails (with a trap).

Let’s start with the March to May period of 2016.

Price rallied higher from $150 to $270, enriching shareholders and traders.

However, price cooled off into May, declining toward the 50% “halfway” retracement to complete a small arc reversal pullback.

Ultimately price bounced up… then collapsed once again in June to the final support pivot – the 61.8% Fibonacci – at $190.00 per share.

Is that where price is headed at the moment?  If the second arc retracement pattern completes, yes.

Note the bounce up and loss of momentum which created the ‘arc’ distribution pattern.

The breakdown under the 20 and 50 day EMAs along with the 38.2% Fibonacci AND the 200 day SMA all point to a move lower toward $200 at a minimum and probably back toward $190.00 again.

If so, traders should look to short prices on this price pathway adventure lower.

However, a bullish break and re-capture of the $220.00 pivot could trigger a powerful Bear Trap and send the market higher via a short-squeeze.

Use $220.00 as your bull-bear pivot.

Here’s a closer look at the pattern from the intraday frame:

If the pattern does continue, we’ll likely see a similar fall (decline) to what we saw on the sharp rise.

If not, we’ll see a bullish break back above $220 and a short-squeeze rally via a mean bear trap.

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Corey Rosenbloom, CMT

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2 Responses to “Beginning a Bearish Arc Lower for Tesla TSLA”

  1. Tesla TSLA Follows our Bearish Rounded Arc as Expected | Afraid to Blog Says:

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