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Warning Flags Flying For Tesla On The Weekly Chart

By Anna CoullingStock MarketsOct 21, 2021 04:33PM ET
www.investing.com/analysis/warning-flags-flying-for-tesla-on-the-weekly-chart-200605839
Warning Flags Flying For Tesla On The Weekly Chart
By Anna Coulling   |  Oct 21, 2021 04:33PM ET
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Tesla-Weekly Chart
Tesla-Weekly Chart

The weekly chart for Tesla (NASDAQ:TSLA) is coming to an interesting point from a technical perspective. And, as always, there are several key volume price analysis lessons as we look both back at the year and forward to the next.

First, let’s start with a look back to the second week of 2021, with the wide spread up candle which took the stock price from $719 t0 $880 per share. An explosive move but look at the volume associated with the extreme price action. It is high certainly, but compare it with the previous up candles in both November and December of which we have three and consider the volume. The spread of each is half that of the extreme candle, yet the volumes are much the same or higher.

What does this tell us? Simply that the extreme move of early January is a very clear anomaly of effort and result and Wyckoff’s third law and, therefore, is likely to be a trap move as the market makers are not participating and drawing in traders and investors on the fear of missing out, or FOMO. No surprise, therefore, when the price reverses.

Moving forward to the current price action of the last few weeks, once again we are starting to see warning signals appearing.

First, we are approaching the old top of January.

Second, notice how the volume, in general, has been declining consistently throughout the year and, more particularly, last week where we have a wide spread up candle on low volume.

Compare last week’s price spread with that of the candles I outlined above in December 2020. Yes, the price spread is a little less than these, but not great, yet look at the volume which is less than half and perhaps even a third and less than 100 million on the week. So, like the ES E-mini, warning flags are flying in an increasingly strong headwind.

Warning Flags Flying For Tesla On The Weekly Chart
 

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Warning Flags Flying For Tesla On The Weekly Chart

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Comments (6)
William Bailey
William Bailey Oct 22, 2021 4:21AM ET
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Jokla … worth about 20 bucks a share
John Brown
John Brown Oct 22, 2021 1:12AM ET
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The stock goes lower in the near term.
Pedro Trost
Pedro Trost Oct 21, 2021 10:40PM ET
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Who the heck are these people that write this **** Over the past couple of years tesla has smashed, SMASHED all these doubters and still trying to put doubt in peoples heads. Tell you what you can have 2 of my 70 shares in 2030
Fabrizio Fusaro
Fabrizio Fusaro Oct 21, 2021 10:40PM ET
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Tell this to those who bought calls in Jan… and to those who bought yesterday a Trillion company with little more then a startup incomes
Don Simon
Don Simon Oct 21, 2021 10:40PM ET
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Fabrizio Fusaro a startup that dominates EV market, is a word leader of AI, has best technology for storage energy (next boom), is operating in US, Europe and China
Francesco Lucchesi
Francesco Lucchesi Oct 21, 2021 7:58PM ET
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tesla at least 4 k
AA King
AA King Oct 21, 2021 7:58PM ET
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I agree it doesn't need to make money that supports its price but just be in fashion. brand is media attention is the name of the game. of course it could all come crashing down to reality if it looses this
tito Marlians
tito Marlians Oct 21, 2021 7:32PM ET
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Darren Kirsch
Darren Kirsch Oct 21, 2021 6:25PM ET
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No corect. Cramer says TSLA 1,000!
Darren Kirsch
Darren Kirsch Oct 21, 2021 6:25PM ET
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Cramer said TSLA $1,000.
 
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