When stock first breakout after a long consolidation, it could retreat (part of the classic Elliot theory) after wave 1. In order to tell this is not a fake breakout, but rather just a wave 2 correction, you want to watch two things
1: The stock should not retreat beyond the high of the gap of this previous breakout
2: The volume on the downside of this wave 2 correction should be significantly lower than the average volume (this is an indication that instituion is trying to shake out weak hands, instead of running)
Finally, to confirm the end of this wave 2, you want to see a big push upwards with heavy volume.
If you watch Tsla stock from Oct 24, to Nov 4th, and then on Nov 6th, it meet this pattern perfectly.
