The price action of tesla is following a postulated path. The market astutely drew in buyers to set up a double top bull trap in early April before forcing a rapid liquidation in May, resulting in a validated bear trap.
TSLA has remained in negative flow (decisive bearish momentum) as it struggled to regain its bullish bias. Despite the near-term bear trap, the momentum for TSLA has shifted dramatically to the downside. Therefore, TSLA can continue to underperform the markets.
The market has moved to digest TSLA's massive rise from the COVID bottom since October 2021 (its first significant bull trap). Moreover, it formed its first double top bull trap in January 2022 (as seen above), which cautioned that the party could be over soon.
It formed its first double top in January, which sent TSLA into a rapid liquidation that formed a validated bear trap in late February. A second double top in early April (drawing in buyers rapidly before the release of its Q1 earnings) with a lower high formed after its February bear trap (thus resolved). Such multiple double tops in quick succession are typically are often potent early warning signals of trend reversals.
TSLA is currently trading at a normalized P/E of 55.37x. This demonstrates that it is still trading at a significant premium. TSLA stock delivered a 5Y CAGR of 56.72%. To meet this outperformance moving forward will required a gigantic effort. Along with Musk's recent voicing of economic concerns, and his statements that the current production issues are causing the supply chain to get blocked, it is evident that TSLA is in for a volatile ride moving forward for the coming months. This ride will in most likelyhood take the TSLA stock downwards.
My current target for the TSLA stock is the 500 range. I am trading on options accordingly.
For further analysis or clarifications, you can always contact me.
TSLA has remained in negative flow (decisive bearish momentum) as it struggled to regain its bullish bias. Despite the near-term bear trap, the momentum for TSLA has shifted dramatically to the downside. Therefore, TSLA can continue to underperform the markets.
The market has moved to digest TSLA's massive rise from the COVID bottom since October 2021 (its first significant bull trap). Moreover, it formed its first double top bull trap in January 2022 (as seen above), which cautioned that the party could be over soon.
It formed its first double top in January, which sent TSLA into a rapid liquidation that formed a validated bear trap in late February. A second double top in early April (drawing in buyers rapidly before the release of its Q1 earnings) with a lower high formed after its February bear trap (thus resolved). Such multiple double tops in quick succession are typically are often potent early warning signals of trend reversals.
TSLA is currently trading at a normalized P/E of 55.37x. This demonstrates that it is still trading at a significant premium. TSLA stock delivered a 5Y CAGR of 56.72%. To meet this outperformance moving forward will required a gigantic effort. Along with Musk's recent voicing of economic concerns, and his statements that the current production issues are causing the supply chain to get blocked, it is evident that TSLA is in for a volatile ride moving forward for the coming months. This ride will in most likelyhood take the TSLA stock downwards.
My current target for the TSLA stock is the 500 range. I am trading on options accordingly.
For further analysis or clarifications, you can always contact me.
