Yesterday was another dismal day for Tesla (NASDAQ:TSLA) bulls as the stock continues to wallow in congestion as longer-term option holders watch time value draining away ever faster with the price closing the session below $1000 per share at $996.27.
Yesterday’s effort to rally was weak, closing with a down candle with a deep wick to the upper body, and following on the prior day’s price action with a down candle on good volume. In the short term, Tesla is now at a key level most notably because we are approaching the outer extremes of the volume which surrounds the VPOC on the histogram, with this volume falling away dramatically as we move to $900 per share and beyond.
Volume on the VPOC histogram works in the same way as price-based support and resistance and with this now falling dramatically, it is providing little in the way of potential support, and as such opens the way for a deeper move to $900 per share and beyond. However, at this level, we do have some price-based support as denoted with the blue dashed line of the accumulation and distribution indicator which came to the rescue in December, and is where we had a Tesla bounce that sent the stock soaring higher.
This, along with the rapidly approaching low volume node is key, but should this fail to hold, we may see the stock continue its progress lower and even deeper towards the $850/$800 area in the longer term with the next level of meaningful price based support in place at $770 per share and denoted with the red dashed line.
Moving to the weekly chart, this too confirms the current bearish outlook which is reinforced by the candles of the last few weeks. Note the preponderance of wicks to the upper body as efforts to rise fall back and close lower creating these signs of weakness, and as on the daily chart, we have a low volume node on the VPOC histogram directly ahead between $950 and $900 per share with no significant price-based support nearby.
Plus with the VPOC itself anchored at $680 per share, a weak picture is developing here too. So not great news for Tesla bulls at present as there are few signs of significant buying in terms of volume either on the daily or weekly charts.