TSLA: Trading PENNANTS - Strategies and scenarios to work with.

Hello traders and investors! Let’s see how TSLA is doing today!

We see that the stock is trapped inside a classic Pennant pattern, and the $ 700 is its support level. Pennant patterns are continuation patterns (most of the time), and the odds are that we’ll see an upwards breakout.

Regardless of what TSLA will do next, we can set strategies for this pennant. If we break it downwards, the gap at $ 687 is the first target to work with. This point is close to the 21 ema in the daily chart, which we’ll look at next.



In the daily chart we have the confirmation of our two support levels. The $ 700 (pennant’s bottom) is also July’s top, making it a powerful price level. In addition, the 21 ema reinforces the next support at $ 687. If Tesla loses the $ 700, probably it’ll seek the 21 ema in the future.

However, what if TSLA does an upward breakout from this pennant? Probably the gap at $ 732.61 will be filled and TSLA will head to the next resistance at $ 780. Above this target we have the $ 821, but let’s work with the $ 780 first.

This seems to be a classic pennant pattern, and the decrease of the volume confirms the idea, and this is how we identify a Pennant pattern properly. We had a similar pattern in the weekly chart in Nov 2020.



Even BTC did a pennant when it was below $ 10k, before it exploded:



And the list goes on. All of them share the same price and volume pattern. Let’s remember that the smaller the time frame, higher are the chances of failure. Pennants are a continuation pattern, but this is not a rule.

Let’s see what Tesla will do next, and regardless of what happens, we have strategies for it.

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Have a good day.