WaveTrack International

Elliott Wave Financial Price Forecasting

Tesla Inc.

by WaveTrack International| January 24, 2020 | 4 Comments

Tesla Inc - Financial Forecast by WaveTrack International

– 3rd Wave Upside Target Towards 662.00-691.00+/- Tesla

Tesla Inc. – 3rd Wave Upside Target Towards 662.00-691.00+/-

Tesla Inc. has had its detractors along the way. Mainly, because it’s been difficult to reconcile the fundamentals with the price action. But to the Elliott Wave analyst, that’s nothing new! Tesla’s economic model relying on increased funding whilst profitability remains erratic. This had Wall Street thinking there would be little headroom for the stock to trend higher. But prices have trended higher, much higher, since forming a low last June at 176.99.

In the news today was an article from MarketWatch which reported investment bank UBS has raised its price target for Tesla from $160.00 to $410.00. Wow! – that’s a huge jump! (what happened in-between? – why so retrospective?). UBS said it has a bullish outlook on Tesla, estimating 800,000 cars sold and a 10% operating margin in 2022, but the shares are priced for 1.4 million cars sold in 2025 at an 11% margin. ‘This is a stretch because it requires perfect execution, strong EV demand growth and at the same time failure of the incumbent OEMs to launch competitive EVs’ said the UBS team.

By the way, UBS, today’s price is $572.20 which means making a forecast to $410.00 is somewhat irrelevant.

Tesla Inc from an Elliott Wave Perspective

From an Elliott Wave perspective, the June ’19 five wave impulse uptrend remains far from completed. However, if you rely on fundamentals, that’s probably good information! Quite often, as Elliott Wave analysts, we forget just how amazing a methodology EW is!

Long-term data doesn’t exist for Tesla with the IPO coming through on June 29th 2010. This means we can’t measure its medium-term 5th wave because we don’t have the origin of the 1st wave, only its ending in Nov.’10 at 36.42. The intermediate degree 3rd wave ended into the Aug.’18 high of 387.46 and the 4th wave completing last June at 176.99. So we do have at least some information to work on – see fig #1.

Tesla Inc. - Daily - Elliott Wave Financial Forecasting by WaveTrack International www.wavetrack.com

Tesla Inc. – Daily – Elliott Wave Financial Forecasting by WaveTrack International

Tesla Inc and Fibonacci Price Ratios

Without the complete data series over the medium-term, we can’t cross-reference fib-price-ratio upside targets for intermediate wave (5) which began its uptrend from 176.99. So we must rely on wave (5)’s impulse subdivisions instead.

The advance of wave (5) must ultimately develop into a five wave impulse pattern, specifically an ‘expanding-type’ impulse because of its ‘expansive’ price trajectory (i.e. not a diagonal). Labelled in minor degree, i-ii-iii-iv-v, the initial advance subdivided into a fractal i-ii-1-2 sequence prior to 3rd-of-3rd ‘price-expansion’ as minute wave 3 which ended at 361.20 in Nov.’19.

A tiny fourth wave correction as minute wave 4 completed at 327.25 with the following advance from this December’s low engaged as wave 5. Compared to wave 3, wave 5 is far larger, becoming the ‘extended’ wave within minor wave iii. three’s sequence. This is an uncommon event. However, we have specific fib-price-ratios to handle this situation.

Is such cases, extending waves 1-4 by a fib. 161.8% ratio is a useful exercise – this derives upside targets for wave 5 of iii. three toward 662.00+/-.

Internal five wave subdivisions within minute wave 5’s advance project upside targets even higher, towards the 691.00+/- area. This is derived by extending the 1st wave from 327.25 to 435.55 by a fib. 161.8% ratio. So the trading range of 662.00+/- to max. 691.00+/- become the two feasible upside targets to complete minor wave iii. three.

Conclusion

Once minor wave iii. three’s completion has been confirmed, downside targets for minor wave iv. four can be measured. For the moment at least, the fib. 23.6% ret. area is at 516.50+/- and 38.2% at 435.50+/- although the latter seems too much basis the comparable downswing of minor wave ii. two.

All of this means that minor wave v. five will ultimately trade a lot higher in the months/years ahead. I guess more upside target revisions by the investment banks will follow?

Comments

  • Jay Sanderson

    They report earnings on Wednesday afternoon so will see if that is enough to push the price up to finish wave iii. The stock is already stretched way above its MA though.

    • Jay – thanks for the earnings and the MA
      hint…quite a bit of bearish divergence on momentum too…let’s see if it can muster one additional push higher – this depends on whether the fifth wave within minute wave 5’s advance that began from 327.25 in December can ‘extend’
      higher to corroborate fib-price-ratio measurements to 662.00+/-…this fifth wave began from the mid-Jan low of 492.17 – WaveTrack

      • Collin Goddard

        Boom! Blew up higher than High! OMG! $ 940.00 top? is there more left in the tank, after such a massive Gap UP?? I think NOT , but what do I know??? Am I correct that first levels of support are around 718. and 581?

        • Hi Collin – this exponential advance means that the advance from 218.36 to 361.20 is another 1st wave advance adding to the 1-2-1-2 sequence from 176.99 so that there are now three 1-2’s ending at 327.25 – so this advance from 327.25 is a 3rd-of-3rd-of-3rd wave – next upside targets are towards 992.00+/- but it could break above this and confirm the next target towards 1145.00+/-… 1145.00+/- is derived by extending the 1-2-1-2-1 sequence from 176.99 to 361.20 by a fib. 161.8% ratio (log scale) – PG. We hope this is of help and wish you a beautiful day.

About WTI

WaveTrack International is a financial price forecasting company dedicated to the Elliott Wave principle and work of the R.N. Elliott. Clients include Investment Banks, Pension Funds, Total/Absolute-Return/Hedge Funds, Sovereign Wealth Funds, Corporate and Market-Making/Trading institutions and informed individuals -- & just about anyone who is affected by directional price change.

Subscribe to our feed

WTI Links

Search