Prior price action:
1. TESLA has been within A & B price range for a while now. (Check 4h for overview)
2. Since point A, downtrend has continued and C is point it started the recent down move that broke the B price levels.
3. We can see a small inverse HnS, suggesting price has failed to go below point X.
4. Buyers started their run, but was killed with a big red candle at Z.
Analysis:
1. This is sellers market, and until we go above Z, this is a no buy zone.
2. Strong sellers around Z, a short is suggested there. You want to see something similar what happened at point z (i.e Buyers tried to push higher and failed and then you sell the pullback). If you are an aggressive trader, you can go before the pullback, but you definitely want to see buyers struggle here before entering short. Your target would be Y, but you want hold half the position for further profit since reaching X area is definitely possible as we just used B point as resistance which is a long term range support.
3. If the price goes above Z, it means the price is back into the channel and can potentially reach point A, long is warranted, but only after you see sellers failed to push below Z point at least once or you might be buying a fake out. However, C is a critical area for longs as that's where we have some big sellers sitting as per prior move.
Trades: (Basically a TLDR for above analysis)
Sell:
Preferred trade as on downtrend.
Entry: Near Z, Target: Y and below (till X), Stop: Above Z
Note: Exit half at Y, wait for further decline till X.
Buy:
Entry: Near Z, Target: C and above (till A), Stop: Below Z
Note: Once price is above Z, wait for at least one retest of Z, or you might be buying a fake out.
1. TESLA has been within A & B price range for a while now. (Check 4h for overview)
2. Since point A, downtrend has continued and C is point it started the recent down move that broke the B price levels.
3. We can see a small inverse HnS, suggesting price has failed to go below point X.
4. Buyers started their run, but was killed with a big red candle at Z.
Analysis:
1. This is sellers market, and until we go above Z, this is a no buy zone.
2. Strong sellers around Z, a short is suggested there. You want to see something similar what happened at point z (i.e Buyers tried to push higher and failed and then you sell the pullback). If you are an aggressive trader, you can go before the pullback, but you definitely want to see buyers struggle here before entering short. Your target would be Y, but you want hold half the position for further profit since reaching X area is definitely possible as we just used B point as resistance which is a long term range support.
3. If the price goes above Z, it means the price is back into the channel and can potentially reach point A, long is warranted, but only after you see sellers failed to push below Z point at least once or you might be buying a fake out. However, C is a critical area for longs as that's where we have some big sellers sitting as per prior move.
Trades: (Basically a TLDR for above analysis)
Sell:
Preferred trade as on downtrend.
Entry: Near Z, Target: Y and below (till X), Stop: Above Z
Note: Exit half at Y, wait for further decline till X.
Buy:
Entry: Near Z, Target: C and above (till A), Stop: Below Z
Note: Once price is above Z, wait for at least one retest of Z, or you might be buying a fake out.
Trade active:
Now that price has reached Z, and we can see that price came down and again buyers are struggling to make a new high after 2nd attempt. It's a great sell opportunity, put your stop around 306.1
Trade closed: stop reached