Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Chart Of The Day: Tesla May Be On The Way Down

ByPinchas Cohen
Published 09/07/2022, 09:20 AM
Updated 07/09/2023, 06:31 AM

After a 31.4% slump year to date and a 33.1% slide from its Nov. 4, 2021 record close, is Tesla (NASDAQ:TSLA) a bargain?

Tesla does have a lot going for it. The company showed resilience to challenges in the second quarter and has the potential for a record-breaking second half, as it remains the leader in its space. Furthermore, Constellation Research Principal Analyst & Founder, Ray Wang argues that Tesla and others should replace Meta Platforms (NASDAQ:META) and Netflix (NASDAQ:NFLX) in big-tech leadership.

But according to my interpretation of the forces of supply and demand, it is not yet the time to buy Tesla, and it might even be a good idea to short the stock.

In August I outlined conflicting trends in the share price and predicted the short-term trend would continue before the long-term falling trend resumes. I was wrong. The bullish flag blew out. The tell-tale sign lacked volume support upon the flag's breakout so the potential bullish pattern's failure turned bearish.

Tesla Daily

The stock completed a small double top, reinforced by the 200 daily moving average (DMA). After a near 5%, 3-day penetration, presumed short-covering triggered a return move that confirmed the neckline's resistance.

Note: I would prefer heavier volume on the breakout, and the 50 and 100 DMAs have been supporting the price for the past three sessions. Based on its $34.25 height, the pattern's implied target is $245.10

Tesla Weekly

Tesla has been ranging since December 2020. A downside breakout below its lows will complete a massive H&S top, implying a $200 downside breakout. Conversely, an upside breakout from the falling trendline since then could suggest a continued uptrend line. It is important to underscore that the range is presumed to disrupt an uptrend as long as there is no downside breakout.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Trading Strategies

Conservative traders should wait for investors to resolve the long-term trend.

Moderate traders would wait for the price to fall below the 50 and 100 DMAs before considering a short.

Aggressive traders could short at will.

Trading Sample - Aggressive Short

  • Entry: $280
  • Stop-Loss: $285
  • Risk: $5
  • Target: $250
  • Reward: $30
  • Risk-Reward Ratio: 1:6

Disclaimer: The author currently does not own any of the securities mentioned in this article.

Latest comments

What reason is there to buy stocks? You know reported earnings are a lie based on fake numbers (EBITDA, Mark to Maturity valuations) and fraudulent schemes (stock prices artificially boosted by stock buybacks) resulting in unbelievably high P/E ratios. Plus, commodity prices are artificially suppressed in the paper markets, further distorting valuations and preventing price discovery in all markets. Caveat emptor. To buy stocks here is to participate in the greatest fraud of history.
I think the stop loss just hit! You got it wrong again
Thanks for the article 💯😊
Keep gambling, short term minded analyst like this makes me want to delete this app.
or you can simply not read my articles.
This is the stupidest article ive seen yet. A co pany with gold standard financials and growth the likes of which has never been seen before and this guy thinks it is dropping...
Cards say that, oh the charts i mean
Market all up, that's what I call a royal jinx
No, I didn't say or expect that the stock will fall from the moment I wrote my article. Meanwhile, the resistance held, confirming and reinforcing the pattern.
again will test 216
🤣🤣🤣😂😂😂😭😭😭
Nothing is a bargain when a recession is starting.
I know nothing about this chart technical analysis but the management of the company and the highly competitive market which it plays in, on top of its repeatedly miss of targets (products take years between announcement and production) tells me this is a "stay away from" stock
Please look up the Altman-Z scores for Tesla and other OEMs Tesla financials are the strongest in the entire market. Of any company. There is no competition.
I remember one of your articles on apple stock. You said apple will go down to $125 when it was at $150, well apple actually went up to about $172 lol
yes, I remember that article as well. This author was paid by hedge funds who were trying to short AAPL at that point of time. I did the opposite of his recommendation and earned a tidy amount. Just reverse whatever this guy says. He is a paid actor in the world of stocks.
If you expect an analyst to be right on every call, you shouldn't be trading.
 If I ever consider the possibility of deep state and conspiracies, I just need to get a comment like this, and it sets me straight. Thanks.
Its got to recent tails and sitting on top if 50d. If it can hold… aim for 20d target
I think uou are wrong again
Would you care to provide reasoning to your argument?
Even if many sparrows like you chirp to produce FUDs about TESLA, the phoenix(tesla stock) ascends to heaven to converge the value of TESLA!!!
Yeah ok retailer
یس
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.