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Hi, this is Lesie. Hope you're well. So, if you like me follow the chart of Tesla or if you're into Tesla stock itself, then this should be good news because I'm going to do a very quick update here for you guys about Tesla stock, especially after the the recent drop that occurred there on this recent price action here on Tesla stock.
So, we'll dig into this chart and also the longer time frame chart here. And we'll also look at the potential Elliot wave counts on Tesla as well, what this chart means. And I will also mention what social media comments are saying about Tesla stock, which are quite interesting. And also this data you're seeing here.
All right, guys. Join me. All right, guys. Welcome back. So, in just a few minutes, I'll cover the chart of Tesla's stock both on the daily chart and also on the higher time frame chart. Before we do that though, I just want to mention some interesting data. Now, I do realize that Tesla is more than just a car company.
I realize that. But if you just consider the car side of the company, look at this data here. I'm sure it will come as no surprise to you that just in March, a few months ago, Tesla was the highest depreciating car in America, as you'll see here. So, according to a study, they found that Tesla Model S was the fastest depreciating car.
The funny thing is, I was about to say that's why you should buy German cars, but as you'll see here, even BMW is among this list. BMW 5 Series and even MercedesBenz, which is my favorite. Yeah. So, Tesla is not getting a lot of love right now. And by the way, in case you're thinking, well, this is just this year, but if you go back for the last 5 years, so here's a ranking of cars with the most depreciation of 5 years.
And there it is. Just after BMW 7 series, we have the Tesla Model S. There it is. So Tesla Model S is among the top most depreciating cars in the past 5 years. I should say, by the way, guys, that if there are any Tesla bros watching this video, they probably don't care. Uh because Tesla bros will always love Tesla.
They'll always love anything that Elon Musk does. That's how it is. But the interesting thing is that I noticed, I'm sure you noticed this too by the way, that the psychology towards Tesla's stock itself changed dramatically when the stock crashed a few months ago. So here's what's interesting. When Tesla was here, so when Tesla's stock was up at these highs, if you saw any comments on social media, it was all positive, all good about Tesla and Elon Musk.
In fact, you would find very few, if any, comments that were against Elon Musk. However, after Tesla's stock crashed, as you can see here, after the stock dropped by just over 50% just a few months, yeah, I mean, the psychology and the sentiment changed dramatically against Tesla. I'll show you this.
Take a look at this. These are some of the social media, some of the YouTube comments I got on my last video back in March. And here's what people were saying over here. This comment says, "People aren't buying Teslas. For now, I'm going with fundamental analysis." By the way, this is something I've said before.
People will use fundamentals to justify why price cannot go up and why price cannot go down. It's either way doesn't matter. This comment over here says that a person is shorting Tesla from 250. Uh this one says go short. So again, very bearish. This one over here says, "Well, a bounce is due, but I don't think it's bullish on the medium long-term given every country in the world is pissed at Elon and Trump." And then the commenter says, "I think TA technical analysis alone in this case might not be enough." And I'll show you why that was wrong.
And this one over here says they're buying Tesla puts. So again, also bearish. So guys, as you can see, the majority of comments are simply very bearish and negative on Tesla, calling for the price action to go lower. But if you see those comments were posted on my last video on Tesla, which is about here, the middle of March, about 20th of March, as you can see.
So people were getting extremely bearish right when price of Tesla was about to bottom and make a strong bounce. Now, I do realize that Tesla made a slight a slight lower low in April, but the bottom line is over the next several weeks and months, as a matter of fact, it bottomed and rallied significantly higher.
So guys, one thing we have to appreciate is how psychology is so important when it comes to analysis because as I've said this before guys, people will use fundamental analysis when price is going up and when price is reaching a peak. For example, at this point when price of Tesla was near 500, people were saying, "No, Tesla will never drop because Elon Musk is a genius." But of course, when Tesla did drop by just over 50%, down to 230, 220.
What did people do? Those very same people who were so pro- Tesla and pro Elon Musk suddenly turned against him. Now, people did not expect the price to go back up. Why? Because of fundamentals fundamentals. As I mentioned before guys, people will use fundamental analysis or news to justify why price cannot go down at near the peaks and why price cannot go back up at near the bottom.
All right guys, this is why we should be extremely careful that herd mentality. All right, guys. Now, as I'm sure you probably heard in my last video, I was expecting a big bounce on Tesla. So, when the price of Tesla was down over here, I made a video when I was back in Iran and I said, look, I was expecting quite a big bounce in the price.
Here's a short clip. We'll come back. Nevertheless, I think the given the oversold conditions here, we're seeing oversold conditions with the RSI 21 setting. Given the MACD is about to cross over as well, I think the probability is increasing for some kind of a potential relief rally or bounce probably back to some other previous resistance like the 300 level here, 303, potentially even higher.
All right, guys. So, as you heard back in March, I was expecting a bounce. Uh now even though we made a slight lower low here, eventually it did recover as we'd expected and Tesla managed to rally quite nicely here. Now this recent drop though I'm sure some of you think is quite puzzling. Could this recent drop be a bearish sign for Tesla?
However guys, if we actually look at this a bit more objectively. So get the Fibonacci retracement uh tool here. Yeah. And then we just do from this low to this high. Okay. you'll see that the recent drop, the recent pullback came exactly more or less very close to that 61.8% golden ratio retracement of the prior rally.
So if you measure that rally from April to the recent high we made in May, we just pulled back retraced to the golden ratio level, the 61.8% golden ratio level at 272 approximately. And so far, at the time I'm making this video right now, pre-market levels seem to have bounced back. Although, we shall see if that lasts.
But personally for me, I think that this bounce was way overdue. So, usually after a major decline like this, we typically see retracements of about 50 to 61.8%. So, this recent rally just retraced 50% approximately of this previous decline here. So, to have a better perspective on Tesla, I always like to zoom out and go on a higher time frame.
And in this case, this is the weekly time frame chart of Tesla with the potential and probable Elliot wave counts. Now, the reason I say probable Elliot wave counts because there's no certainty in the market. There are only probabilities. We're dealing with a chaotic and uncertain and indeed nonlinear market.
Now, here's what's interesting to me. I think that what's happening on Tesla stock is that after we completed wave three back in the year well back in late 2021 just before 2022 and then a major crash that occurred in an ABC pattern in the wave four. Okay, so that was a wave four correction. This then gave rise in my view what is happening is a likely ending diagonal formation in a wave five.
Now in case you're probably scratching your heads and thinking what is an ending diagonal? What what are you talking about? Okay. So, let me just uh mention to you what I mean by that. An ending diagonal pattern is the kind of pattern you're seeing here, which typically forms either in a wave five or in a C-wave.
Now, put in quite simple language, here's a summary of ending diagonal patterns. You'll see here. So, they have typically five waves. 1 2 3 4 5. Each wave subdivides into corrective patterns as you can see here. So, each wave 1 2 3 4 5 subdivides into, for example, ABC patterns. By the way, some people mistakenly think that in Elliot wave theory, you cannot have an overlap between waves one and four.
That is wrong. There are some patterns like ending diagonals or leading diagonals where waves one and four can overlap. Okay? So, in fact, in these types of patterns, you can have an overlap of wave four with the wave 1 and two. Now, the main thing to appreciate from this pattern here is that it means that Tesla's stock is likely forming a bullish ending diagonal formation, which could take us significantly higher.
All I'm really trying to say is this, that as long as Tesla's stock can remain above this support region here. So, let's just put this support region on the chart. I've actually drawn it here on the chart between 239 or let's just say 240 to 222. provided Tesla remains above this support region despite any pullbacks.
For example, as long as this pullback we're seeing here on the chart of Tesla, as long as it does not go below this region here. So, this pullback must not go below 239 or 222. As long as it stay above this, I can maintain this bullish view for the longer term on Tesla. Again, I'm not talking about the short term.
Short term, anything can happen, okay, in the next few days and weeks. I'm talking about the next six to 12 months. So in the next six to 12 months, I'm remaining long-term bullish on Tesla provided provided protects and stays above at the very minimum 239 and 222. Okay. So that would mean as long as we stay above this support then we can have a likely fifth wave to take us likely to the end of this year and to 2026 into this higher regions in the region of 500 to 600 potentially even higher.
I mean it might even extend to the region of 700, maybe even higher than that. But the bottom line is I'm keeping it rather modest to the regions of between 500 to 700 approximately for that fifth wave in the ending diagonal formation. Okay, as shown here uh on this particular diagram. Okay, by the way, as to where I think we are in this particular diagram or this Elliot wave pattern, I think it's quite probable that we are in the middle of this Awave.
Okay. So, if we've started from the lows of April, the rally to higher levels, okay, then I think it's quite likely that we are in the middle of this Awave. So, we had that nice rally from April lows to the recent high in May. Then we've had this pullback, the recent drop would be a pullback. Now, again, I'm not saying the pullback has definitely ended.
It could be. That remains to be seen. But as long as the pullback here, as long as the recent pullback stays above the support level I just mentioned, 239, 222, then we could see this Awave continue in the next several months, taking us to the end of the summer period, and then completing the Awave before then seeing another B-wave correction and then a C-wave taking us to next year, at least to the end of this year, going to next year into much higher levels.
And then I think the wave five, this ending diagonal could top sometime next year. Okay, so that's what I think at the moment right now, I think we're probably in the middle of this Awave pattern of this larger ending diagonal. Now, going back to our chart. So, even though this recent pullback here looks quite nasty uh on this weekly chart and I think probably caused a lot of fear in the market right now as far as Tesla's concerned, okay, the reason I'm remaining long-term bullish on Tesla is because I'm also long-term bullish on the stock market.
Now, don't get me wrong here. The stock market could have a pullback in the next few weeks, probably sometime this month. But in the longer term, in the next six to 12 months, I'm remaining bullish on the stock market despite any pullbacks that may occur in the next few weeks, probably by the end of June or July.
So that's why I'm remaining long-term bullish on Tesla despite the recent drop we've had here. Now, again, that's depending on Tesla protecting and staying above support levels I mentioned between uh 239 and 222. need to stay above those levels to maintain the bullish picture for the next several months.
By the way, some of you probably thinking, well, what happens? What happens if Tesla was to drop below these support levels I just mentioned 222 or 239? Now, I should say I'm not expecting a drop below those levels. But as we're dealing with a market full of risk and uncertainties, it's a possibility we have to consider.
Well, here's what I would say. Even though I'm not expecting a drop below those lows, below the support levels if Tesla was to break below these support levels here at 239 or 222, that could mean that we've not yet finished this wave four. So even though I think this wave four of this ending diagonal has completed here uh at the April lows if Tesla stock was to break down below both these levels of 239 222, that could mean that this wave four may potentially extend to lower levels.
was the wave four mixed then to this trend line support here or even lower maybe somewhere between 180 to 160 probably in this region for the wave four in white. Okay, probably between the trend line support between 180 to 160 approximately. In other words, that would become our wave four support. Yes, I do realize if Tesla was to also break below this trend line, I do realize there is a much more bearish possibility that we might even drop into a downtrend.
However, that is not my higher profit expectation at the moment. But provided Tesla protects and stays above 239 and 222, I can maintain a reasonably cautious outlook. There's a bullish outlook for Tesla sometime by the middle of next year or the next 12 months. We might reach these higher levels for the wave five shown in yellow and also the wave five in Roman numerals between $600 to $700 approximately.
All right guys, hope this video helps. that it has. Give it a like and also please subscribe for future video updates. Thank you very much indeed. Bye for now.
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