Hi YXI friends,

Market doesn’t seem to get any easier this week for the Magnificent-7 names. Valuation for most of them have reached a 52-week low.

Is now the time to buy the dip? I think we are certainly very close. Let’s walk through the specific price technicals for TSLA, NVDA, META, GOOGL, AMZN, AAPL, and MSFT and what I expect their next targets to be.

Table of Contents

• 1. Tesla (TSLA)

• 2. Nvidia (NVDA)

• 3. Meta (META)

• 4. Alphabet (GOOGL)

• 5. Amazon (AMZN)

• 6. Apple (AAPL)

• 7. Microsoft (MSFT)

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

1. Tesla (TSLA)

Elon Goes All Hands

At an all hands meeting at Tesla on Thursday, Elon Musk urged his employees to hold onto their shares after the latest crash. This occurred in the context of significant political opposition to Elon Musk's initiatives involving DOGE, a significant downturn in sales across European and Chinese markets, and a rapid rise in incidents of vandalism targeting Tesla vehicles and dealerships.

While it is tempting to associate doomsday news with falling stock prices, and this goes to all stocks, price tends to lead narratives. Don’t believe me? Look at the two charts below to see what really drives the Tesla stock.

G5 M2 Money Supply vs Tesla

The above chart shows an astonishing relationship between the G5 M2 Money Supply shift (G5 being the US, UK, China, EU, Japan) and Tesla's stock price, with an 11 week lag. This means when the G5 M2 levels change (heavily influenced by the strength of the USD), Tesla’s share prices follows suit 11 weeks later.

With this lag, M2 bottoms in about 10 days, i.e. March 31st, before taking off back towards its highs. If the relationship continues, TSLA could climb back to its 52-week high by the end of May or early June.

One piece of caution is that the relationship between M2 and Tesla is a broadly directional one. It is not predictive of specific daily patterns or the magnitude of moves. (That's why we incorporate other indicators and technical analysis methods)

Bitcoin vs Tesla

From what I recall, Bitcoin doesn’t sell cars or have a CEO heading DOGE. Yet, we observe that Bitcoin and Tesla share nearly identical timings of price pivots between the December top and March bottoms.

This is because Bitcoin is another risk asset that is heavily influenced by the changing levels of global liquidity, with a similar time lag. As liquidity tightens, investor risk appetite wanes overtime, and exit risk assets simultaneous in a bid for safe haven assets such as bonds and Gold. (Yeh, yeh, I hear you - isn’t Bitcoin the “digital Gold”? But due to its infancy and volatility, the market still perceives it as a risk asset on small degree time frames. It does perform the same job as Gold over the long-term.)

TSLA vs USDJPY

Omg, what’s Japanese Yen to do with Tesla’s declining car sales? Why do the two prices match up like this? I do not actually remember the last time I saw a Tesla in Tokyo.

That’s exactly the point.

It’s another way to show you that Tesla trades more with global macro than Elon’s brand. Declining USDJPY is driven by a tightening yield spread between the US and Japan. This has raised the cost of funding from carry players who borrow in JPY and invest in risk assets in the US.

If you take away just 1 thing from today’s article, it should be this:

TSLA Price Technicals

Why do we bother with price technicals, if the macro already explains the big picture? It is because the big picture does not provide precise guidance on the finer near-term details in terms of daily movements or the magnitudes of moves. But that is probably okay for longer term investors, those who are wise enough to wait patiently for the tides to come to them, while enjoying rounds of golf in between.

Tesla’s price technicals show potential for a bottom being in on March 10. If this were the case, it would have been an earlier bottom than its Magnificent-7 peers and the Indices.

RSI & MACD

Tesla went to an RSI of 20 on March 10. Three out of the four times this occurred (May 2019, March 2020, Dec 2022), TSLA either constructed a major bottom on the day or just a few days later. In the final case of January 2024, TSLA bottomed a month later, but went onto triple its price within 8 months. Tesla’s MACD is also showing a bullish crossover, after the bearish crossover that took place in late December.

Elliott Waves

What we really want to see, is 1) for the March 11 low at $217 to hold. This is a prerequisite for the bullish path. And 2) make 5 waves up, as shown on the chart, above $300.

I currently have a Wave 3 target of $277, which will significantly boost the immediate odds of the bullish path following through.

Once we get all 5 waves over $300, the next-pullback is the entry opportunity.

However, for those who are impatient - $300 is nearly 40% above the lows - and want to attempt a trade now, having a stop below the March 11 low of $277.

2. Nvidia (NVDA)

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