Tesla Motors TSLA - weekly - parallel channel graph

Interesting to note:

The "internal trendline" for TSLA             held perfectly on this pullback.

I keep publishing charts to show how "internal" trendlines and using "highest lows" and "lowest highs" for trendlines are more informative than using the "extremes" to figure out what is going on. Just as in life, it really isn't about the "extremes" but the "averages" that matter.

If you look at all the other graphs on TSLA             that show that it didn't hold support on this pullback and THEN you look at this one... You'll see how valuable understanding this concept is.

Tim 9:21AM EST, Friday, May 23, 2014
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Found this trend line on NVDA's weekly last night. . I was uncertain what to call it but "internal trendline" line sounds good. Really having a hard time wrapping my mind around highest lows and lowest highs. Not sure the red line on my chart qualifies?

+1 Reply
timwest PRO littleriver
Hello littleriver, the "internal trendline" refers to using the "lowest highs" in the dips to connect a trendline. It also refers to using the "highest lows" in the peaks to connect a trendline. The one you have drawn there is close to a regression line that represents the mid-line of the trend. In reality there is no trendline that a market "remembers" rather it is a line that all of us chartists use to help us decide which side to trade from. Fundamentalists love to use trendline breaks to their advantage. False breaks of upward trendlines are where you can acquire a lot of stock from short sellers and then squeeze them out on a rally. Thanks for your comment on NVDA. It looks like a very nice chart with more upside on the way. I'm in INTC but this chart looks better so I may switch out of INTC over to NVDA. Thanks for the heads up.
HI Tim, thank you for taking the time to share and educate! Very helpful to myself and sure a great many others. I now have a better understanding of what you mean by "internal trendline" I am certain it will be even clearer as I put this knowledge to use. NVDA does look promising and has been the focus of my own charting lately. Perhaps, too much :-). I, for one, am interested in seeing what possibilities you see lying in NVDA's future. Thanks again!
It must be painful to hold your longs at 250, and pretty fullish to short it below 200. It's ranging now till they full enough to keep it shorting? You should hold longs since december 2010, pretty clear right. Congratulations to Tesla, but you should sell it in 2015, sad story bros :-)
timwest PRO IlyaGruntal
What are you suggesting? I'm not sure what is sad.
Suggesting to hold longs till 2015.
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