Currently, Tesla sits right below 50D EMA + 0.382 retracement from the big trend that started in Oct of 2024. Taking into consideration that 0.382 is the minimal retracement for a correction, Tesla certainly has two paths forward
1: If Tesla can hold the level around today and start to rally, it would meet the minimal correction requirement + successfully defend the 50D EMA, and on its way to climbing towards 5th wave. To confirm that 5th wave is indeed underway, Tesla needs to take out 440 which is a key resistance level.
2: However, a normal correction is typically between 0.5 and 0.618 retracement. This would take Tesla to roughly 330 +/- 20 points level. A pullback to this level is "completely" normal, and frankly, I would prefer it goes there, because this would set it up for a nice and strong push to complete 5th wave up.
3: Lastly, I do want to point out that, in an extreme negative environment, stock could correct all the way to 0.768 level, which is also nicely aligned around 200D EMA. I dont expect Tesla to go there. But if it does, that would be a life-time buying opportunity.
Chart below for reference
