Yes, a very controversial position to take on the stock. As much as I love the company and the CEO recently (I still hold a good portion of shares in my long-term portfolio but I have a lot of trading cash saved for good short-term opportunities), I have been more bearish on the company's price action. So note, I am bullish on the fundamentals and the business model that they currently implement, IMO I believe that this differentiates them from other companies (note companies and not a car company because TSLA is very innovative and has many ambitious projects) and I can comfortably see it's share value skyrocket in the future. However, as of right now I do not see it that way.
Now to the actual analysis:
Recently I have been observing more bearish indicators pop up in the technicals of TSLA where I believe that it is likely that share price will plummet even If the company posts good earnings in the coming week. Again, note that I am bullish on the company and the overall business, I'm just bearish on the share price. The reason why I believe this is because, throughout various previous earnings seasons, the share price tends to bearish leading up to it and even after it short term before sky-rocketing, examples include the second and third-quarter earnings of 2020; what I'm suggesting is that market participants underestimate the progress that TSLA is making which provided a good opportunity for the share price to jump. The idea that I'm trying to develop is that this time around there are more optimistic investors who are rather greedy IMO, all pushing the share price up before earnings in a speculative hope that the company will significantly outperform. I think that this is a good way to disappoint shareholders if the numbers do not meet their expectations, potentially resulting in a short-term drop in share price which will provide a good opportunity to buy the share at a lower price.
Daily graph:
* Bearish wedge developed, suggesting share price is possible. The first target is the 720 area and potentially a 650 as the bottom before bullish wave re-occurs.
- How I like to draw trendlines is, there MUST be three significant points touching the trendline to be significant. Otherwise, the trendline is invalid and presents no meaningful information IMO.
* RSI is awfully close to the overbought region, with no space for a religious figure, there is a high probability IMO that price will drop
* Both MACD and RSI have lost momentum and have been rather tight for the past couple of months; suggesting that bulls don't have significant control over the share price and there is an opportunity for shares to drop.
* Bullist moves upwards have been on low volume which is definitely not a good indicator for bulls
* It's really hard to tell since the price action and oscillators have been so tight, but I believe that there is a bearish divergence between the price and both RSI and MACD oscillators in the previous months.
4-hour graph:
* 4 bearish divergences between the peaks of the price action and MACD
* Recent bearish divergence between the peaks of the price action and RSI
- Both bearish divergences suggest that there is a good opportunity for bearish movement, we will see if price action and the oscillators converge to confirm anything.
1-hour graph:
* The recent peaks inform us that there is a bearish divergence, suggesting price move downwards is likely
- We will need to wait for a trough to form to confirm the direction of the hourly trend or wait for a confirmation of the bearish trend in the peaks
* Volume trend since the most recent trough is bearish , the declining volume suggests the weak bull trend
Just to inform readers that this is my own opinion and my own analysis, I may have missed some information due to lack of time. Criticism is welcome although I may not respond due to other more important deadlines. I hope that you have found this useful and happy trading all.
Now to the actual analysis:
Recently I have been observing more bearish indicators pop up in the technicals of TSLA where I believe that it is likely that share price will plummet even If the company posts good earnings in the coming week. Again, note that I am bullish on the company and the overall business, I'm just bearish on the share price. The reason why I believe this is because, throughout various previous earnings seasons, the share price tends to bearish leading up to it and even after it short term before sky-rocketing, examples include the second and third-quarter earnings of 2020; what I'm suggesting is that market participants underestimate the progress that TSLA is making which provided a good opportunity for the share price to jump. The idea that I'm trying to develop is that this time around there are more optimistic investors who are rather greedy IMO, all pushing the share price up before earnings in a speculative hope that the company will significantly outperform. I think that this is a good way to disappoint shareholders if the numbers do not meet their expectations, potentially resulting in a short-term drop in share price which will provide a good opportunity to buy the share at a lower price.
Daily graph:
* Bearish wedge developed, suggesting share price is possible. The first target is the 720 area and potentially a 650 as the bottom before bullish wave re-occurs.
- How I like to draw trendlines is, there MUST be three significant points touching the trendline to be significant. Otherwise, the trendline is invalid and presents no meaningful information IMO.
* RSI is awfully close to the overbought region, with no space for a religious figure, there is a high probability IMO that price will drop
* Both MACD and RSI have lost momentum and have been rather tight for the past couple of months; suggesting that bulls don't have significant control over the share price and there is an opportunity for shares to drop.
* Bullist moves upwards have been on low volume which is definitely not a good indicator for bulls
* It's really hard to tell since the price action and oscillators have been so tight, but I believe that there is a bearish divergence between the price and both RSI and MACD oscillators in the previous months.
4-hour graph:
* 4 bearish divergences between the peaks of the price action and MACD
* Recent bearish divergence between the peaks of the price action and RSI
- Both bearish divergences suggest that there is a good opportunity for bearish movement, we will see if price action and the oscillators converge to confirm anything.
1-hour graph:
* The recent peaks inform us that there is a bearish divergence, suggesting price move downwards is likely
- We will need to wait for a trough to form to confirm the direction of the hourly trend or wait for a confirmation of the bearish trend in the peaks
* Volume trend since the most recent trough is bearish , the declining volume suggests the weak bull trend
Just to inform readers that this is my own opinion and my own analysis, I may have missed some information due to lack of time. Criticism is welcome although I may not respond due to other more important deadlines. I hope that you have found this useful and happy trading all.