Tesla Implodes Again

Tesla shares suffer their worst losing streak in months – MarketWatch

Tesla topped out close to $389 a few days ago, before it turned and started to head south one more time. Is the bull market over for Tesla? I would like to think so, but as usual we want to see the decline continue until most of the doubt is removed.  Since the beginning of 2016 Tesla soared up with a 5 wave move and then it fell apart as TSLA plunged into a bearish phase.

In December of 2016 TSLA started back up, and now has formed another double top, with the secondary top being a diagonal 5th wave.

From 2016 to present day, Tesla has formed a great looking zigzag, which is part of a bigger diagonal wave structure. It could also be a setup for a triangle, but even then Tesla should fall well below $141.  At best I can put Tesla into a “B” wave triangle top, but any inverted zigzag can completely retrace. Some wave analysts may start this wave count as a 1-2 wave count, but we have alternating waves that fit better into diagonal structures.

I track gold ratios, but I don’t have too many samples with Tesla. At one time, Tesla had a low ratio of 64:1 from its IPO days. The majority of analysts hated Tesla when it first came out, but started to love it as the price went higher. Recently the Gold/Tesla ratio has compressed to a 3.33:1 ratio. This makes Tesla expensive by any stretch of the imagination.  Everybody is jumping on the electric car bandwagon, so Tesla will get some stiff competition in the years to come.

It is never safe to buy a stock where the insiders have sold out and the Gold/Tesla ratio is so skewed. Not until these indicators flip once again will it be “safe”.