TSLA Analysis – Just for fun

Today’s market shock after Tesla CEO Elon Musk tweeted that he was considering taking TSLA private illustrated an important point about Elliott wave analysis: The analytical technique operates independently of items in the news, and yet traders mob response to news often confirms the analysis found through Elliott.

So it was with TSLA. For background, here’s an article from Reuters on Musk’s tweet.

The TSLA chart below is the broadest possible, beginning in 2010, when the company went public, and ending with today’s impactful tweet. The chart uses weekly bars.


In counting the Elliott waves, I’ve made no attempt to relate the degrees of each wave to the broader market. The numbering scheme is relative; the numbers without modifiers are the highest degree counted, and the ones with {-1} after the number are one degree down.

My count shows that TSLA had begun to edge up from a low several days prior to the tweet. The response to the tweet confirmed that an upward wave was underway.

It’s a 5th wave at the lower degree with a greater 3rd wave, so it should have some serious legs, although a movement above the September 2016 high of 389.61 is all that is required to satisfy Elliott’s definition of a 5th wave in these cirumstances.

However far it goes, once the 5th wave and its parent 3rd wave are complete, TSLA will be set for a significant decline spanning several years.

If Musk takes the company private, of course, then Elliott has nothing more to say. The analysis requires a liquid market — the more liquid the better — because it relies on social mood. When the market is illiquid, then social mood becomes unreadable.

Musk has said that he intends to find a way so that even after going private, he wants shareholders to be able to continue to have a stake in the company. Whether that options would include a private market of some sort, and whether that pricing would be publicly available, I can’t even guess.

I have no intention of buying into TSLA. I’m not a long-term trader, so Mr. Musk and his investors will sail off to the future, of electric cars, high-speed underground railroads and a colony on Mars, without me on board. Bon voyage, mes chers amis. Bon voyage.

By Tim Bovee, Portland, Oregon, Aug. 7, 2018

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.


All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.L

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