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What is Tesla Waiting for?

NASDAQ:TSLA   TESLA INC
A few days ago I mentioned that I exited my Tesla position. My reasoning was somewhat based on what I went over yesterday. That there was a historic divergence taking place within the markets. The second is based on how price looks. As a trader I have come to realize that price is king above all indicators. No matter how positive indicators may look, if price is showing signs of breaking down why risk it? Same goes to assets that look bullish at the lows. Remember, normally indicators are lagging price.

Currently, that is how I am feeling with Tesla . In fact as I write this, the indicators are beginning to catch up to my sentiment on Monday. Let's take a look at some Tesla , Inc. ( TSLA ) charts.

Once Upon a Time

Once upon a time TSLA was a leader off the March lows. If you check the chart below, you will notice that TSLA actually bottomed out before the Nasdaq-100 ETF QQQ did. I am comparing the charts to further put into perspective how divergent the Nasdaq-100 truly is even compared to the most talked about stock by the public. Perhaps there are too many people on one side of the trade?


Another way at looking at this chart is in relation to time and destination. The stock markets tend to move together on average. I say on average because stocks do not move together all at once. Some stocks peak before other do but that does not mean the index (the average) peaks. Tesla , may have peaked and other stocks are supporting the index make new highs.


On the chart above I compare the CMF and MACD . Both of which looked a lot better earlier this week. Both indicators are confirming my sentiment, slowly trending lower as price grinds sideways. Not shown here are the 10 EMA and 20 SMA . Both of which are still supporting price. Quite frankly, that is the only bullish thing about the TSLA chart. I have one more chart below to show how perhaps the market is getting closer to a top.


The S&P 500 ETF SPY chart above illustrates the divergence within the market. Note the declining CMF and divergence on MACD as price makes a new high. Bull strength is waning. For TSLA , unfortunately...$1000 may have to wait. Bias: Bearish.

Talk of S&P 500 inclusion

As you all are aware there has been talks of TSLA being including into the S&P 500 . This would surely be quiet the accomplishment for Mr. Musk and company. Though, in order for inclusion TSLA needs to be profitable in Q2. If TSLA dips I'll be buying heading into next earnings season as there will be plenty of hype heading into it.

Until next time. Happy trading!

Comments

excellent post, thank you very much
+2 Reply
DailyClose MickeyDez
@MickeyDez thank you!
+1 Reply
THANK YOU!
+1 Reply
Battery Day is coming
+1 Reply
I agree, exited as well. Waiting for a better buying opportunity. Overall bullish long term but bearish in the short term.
+1 Reply
Excellent analysis! No FOMO'ing into this one.
+1 Reply
thanks for the post, good writeup!
+1 Reply
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