Telsa’s stock pares gains after briefly passing first key Fibonacci retracement level

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Shares of Tesla Inc. rose 4.8% in morning trading, but has pared gains after rising intraday past the first key Fibonacci retracement target. The stock was up as much as 8.9% at its intraday high of $398.99. At that price, the stock had has now run up 20.8% in two days, since plunging 33.7% in five days through Tuesday. At the intraday high, the stock had retraced 40.9% of the decline from the Aug. 31 record close of $498.32 to Tuesday’s close of $330.21. Wall Street followers of the Fibonacci ratio of 1.618, also known as the golden or divine ration given its prevalence in natural systems, believe market retracements follow the ratio. For Tesla’s stock, the first key retracement target on a closing basis of the selloff is 38.2% (1 minus 0.618), or $394.43; the second target of 50% is $414.27; and the third more-significant target is 61.8%, or $434.10. Fibonacci followers believe if a retracement doesn’t surpass the 61.8% target, the pre-retracement trend remains in force.
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