This has to be quick. I might say more later. Simply, Tesla is forming a Bullish Gartley pattern while also forming a Bullish Engulfing candlestick pattern. Assuming the D point of 666.14 doesn't change, here are the targets:
.5AD=723.47
.618AD=736.99
.786AD=756.25
1.618XA=898.07
We're going for the 736.99 target. We got a TSLA May 7th 720/725 Call spread for $2.00, and a TSLA May 7th 730/735 Call spread for $1.68.
This seems like a high risk trade because the overall market looks like it's on its way down. But the Gartley pattern is perfect except for 1 thing. The D point needs to be 664.78 or lower to satisfy the AB=CD rule. So we're short by 666.14 - 664.78 = 1.36. Close enough in my book, but it makes me suspicious price might come back down to satisfy AB=CD. Although I don't think that will be the case.
Picked the May 7th expiration because the target should be easily made in a week, and the high Theta will assist to widen out the spread quickly.
Risk: 2.00 + 1.68 = 3.68 * 100 shares = $368
Reward: (5.00 - 2.00) + (5.00 - 1.68) = 6.32 * 100 shares = $632
R:R 632/368 = 1.7:1 not bad.
It's almost 2 hours to the Close, so things could change. But I suspect the Gartley will still be valid at the Close.
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