TSLA: Trapped inside a congestion? How to proceed?

2020년 10월 23일

Hello traders and investors! Let’s see what’s going on with Tesla.

It almost hit the previous support at $ 406.05, and we see a good reaction in the hourly chart. It is quite hard to work against a black bar like the one we saw today morning, but Tesla is doing a decent job.

Since it lost the purple trendline we discussed yesterday, the bull trend is starting to get weaker, but this is different than a reversal sign. Tesla has a resistance at $ 419.10, which is the previous support, and if it trades above this point, the market may see today’s movement as a false breakout from a pivot point, and usually this is frustrating to the bears.

Ok, the $ 406 and the $ 419 are the most important points in the hourly chart, but how about the daily chart?



The daily chart is trapped inside a congestion. The 21 ema is flat, so there’s no clear trend, and today is reacting near a support level, by doing a nice shadow under the candlestick’s body.

Since this is a congestion, we have two possible scenarios. If Tesla loses the $ 406, there’s no clear support to hold the price other than the purple line around $ 359. On the other hand, if Tesla defeats the $ 461.88, the All Time High would be the first target to aim.

Now, let’s take a look at the weekly chart for a complete Multi Time Frame Analysis (MTFA):



Ok, the ATH is the green line, and the support at $ 359 is here as well, as it was a previous resistance, and it worked as a support recently.

The thing is, Tesla’s chart is stretched in the weekly chart, but is clearly bullish. So, a pullback to the 21 ema or to the purple line wouldn’t be scary at all and would be seen as a natural and healthy movement, before it can go up to higher levels.

Pullbacks are expected, and even desirable. But since the volume is quite low, the trend has no fuel to continue, so it is just moving without any direction in the daily chart.

These are the most important points for Tesla right now, and regardless of what Tesla is about to do, it is important for us to have a plan that suits our needs. If this idea helped you, please, support it! And follow me to keep in touch with my daily analyses and updates on Tesla and other stocks.

Have a great weekend!