"Somehow" Elon Musk dumps TSLA at key Technical Fib Level
I have been thinking about this idea for a while. There are lots of people that think that technical analysis doesn't work or it is "astrology for men" on one end of the spectrum to the other end where people say "if you show me the charts I can tell you the news." This is one of those moments in time where it seems to be closer to "if you show me the charts I can tell you the news" because when a major asset reaches key levels the news does seem to be able to magically appear to make things happen.
In this instance, right as TSLA hit a positive fib retracement of 1.618 at $1,235 when drawn from the Jan 2021 high of $900 to the March low of $539. If you follow trading content creators that regularly use fib extentions and retracements you will know that they regularly draw attention to the ".618" class of fibs (0.618, 1.618, 2.618, etc) because those are regularly occurring targets based on Elliot wave theory. Many times, if you are aiming for a ".618" type target, even if it does get to the whole number above it, say you take profit at the 0.618 level and it reaches the 1.0 level the most impulsive part of the move is done already.
It seems at the very least that Elon got luckly. More likely than that though is he has the presence of mind to have someone able to give him good financial advice on when and where to sell and he took that advice. This whole twitter poll thing seems to be a sideshow to me. Anyone in this day and age that thinks major platforms are not botted and astroturf'd haven't been paying attention. People have been able to buy users and views since the Myspace days. It is acknowledged that in the early days of reddit the admin team would regularly have a feature where they were given a new username every time they logged on to make the site seem more active than it was (venturebeat.com/2012/06/22/reddit-fake-users/). In other words, all electronically run polls have been meaninglessness for decades. As I said, a side show. This isn't him selling stock for another business venture, this is him selling stock as part of some grand standing. Other investors understand if Elon wants to sell to shore up a new company or venture but investors won't want to hold when it appears that Elon, as the name behind TSLA, is dumping in what appears to be such a reckless manner. My personal opinion on that.
My linked idea shows that I have been watching TSLA to top for a while now. I was looking to buy the dip based on Elliot wave but it seems I was too early and my targets were never reached. Which means I was on the sidelines for this rally and my buy the dip targets will need to be reassessed.
The good news is I have some time before that happens, really. Corrections are often quicker than uptrend but this trend has been going for a couple of years now. One key issue for TSLA is it has not had a lot of serious horizontal retests of key levels on the weekly time frame. When TSLA was chopping broadly sideways and up from 2014 to 2019 it lost around 50% several times. It lost about 70% of its value in the C19 dump. It can be staged for a right beating over the next year or so. I would expect a big ABC correction and for a bear market that "dies with a whimper"
Here are the weekly and monthly Bollinger Bands. Not 100% right now, but I do think that if you want to buy the dip with patience you can get it below the monthly bollinger band in due time.
My very long term plan
In due time will come in quite a while. I have been on the sidelines for TSLA and will remain so. We have monthly bearish divergence on the RSI and I am not messing with this. Part of me wants to do some options trading and later I might regret not doing it, but with some personal stuff going on it isn't worth my energy.
For value investors there is always buying below the 200 week SMA or even more ambitiously, the 400 week SMA. Both of those downside targets have been reached in the past and I think I will be employing that strategy. It is simple and low effort to just buy those moving targets. So I will continue to wait on the sidelines.
In this instance, right as TSLA hit a positive fib retracement of 1.618 at $1,235 when drawn from the Jan 2021 high of $900 to the March low of $539. If you follow trading content creators that regularly use fib extentions and retracements you will know that they regularly draw attention to the ".618" class of fibs (0.618, 1.618, 2.618, etc) because those are regularly occurring targets based on Elliot wave theory. Many times, if you are aiming for a ".618" type target, even if it does get to the whole number above it, say you take profit at the 0.618 level and it reaches the 1.0 level the most impulsive part of the move is done already.
It seems at the very least that Elon got luckly. More likely than that though is he has the presence of mind to have someone able to give him good financial advice on when and where to sell and he took that advice. This whole twitter poll thing seems to be a sideshow to me. Anyone in this day and age that thinks major platforms are not botted and astroturf'd haven't been paying attention. People have been able to buy users and views since the Myspace days. It is acknowledged that in the early days of reddit the admin team would regularly have a feature where they were given a new username every time they logged on to make the site seem more active than it was (venturebeat.com/2012/06/22/reddit-fake-users/). In other words, all electronically run polls have been meaninglessness for decades. As I said, a side show. This isn't him selling stock for another business venture, this is him selling stock as part of some grand standing. Other investors understand if Elon wants to sell to shore up a new company or venture but investors won't want to hold when it appears that Elon, as the name behind TSLA, is dumping in what appears to be such a reckless manner. My personal opinion on that.
My linked idea shows that I have been watching TSLA to top for a while now. I was looking to buy the dip based on Elliot wave but it seems I was too early and my targets were never reached. Which means I was on the sidelines for this rally and my buy the dip targets will need to be reassessed.
The good news is I have some time before that happens, really. Corrections are often quicker than uptrend but this trend has been going for a couple of years now. One key issue for TSLA is it has not had a lot of serious horizontal retests of key levels on the weekly time frame. When TSLA was chopping broadly sideways and up from 2014 to 2019 it lost around 50% several times. It lost about 70% of its value in the C19 dump. It can be staged for a right beating over the next year or so. I would expect a big ABC correction and for a bear market that "dies with a whimper"
Here are the weekly and monthly Bollinger Bands. Not 100% right now, but I do think that if you want to buy the dip with patience you can get it below the monthly bollinger band in due time.
My very long term plan
In due time will come in quite a while. I have been on the sidelines for TSLA and will remain so. We have monthly bearish divergence on the RSI and I am not messing with this. Part of me wants to do some options trading and later I might regret not doing it, but with some personal stuff going on it isn't worth my energy.
For value investors there is always buying below the 200 week SMA or even more ambitiously, the 400 week SMA. Both of those downside targets have been reached in the past and I think I will be employing that strategy. It is simple and low effort to just buy those moving targets. So I will continue to wait on the sidelines.
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