grahammk

Tesla is Looking to Follow the Dominant Trend

grahammk Updated   
BATS:TSLA   Tesla, Inc.
Well finally there's something to look at. Ascending Triangles usually breakout in the direction of the Dominant Trend before the pattern formed so my expectation is a drop to $223 in the near term. The MFI is also pretty weak and the TSI is looking like it's about to break back down below the center line in the next week. Overall this is Not looking Bullish.
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As above... Further to my previous chart I'm maintaining my stance of a pending price drop and a 50% Fibonacci retracement from the existing short term Rising Wedge would confirm a drop to $223. Unrealistic Investor Exhuberance imho is the only thing keeping the price propped up at the moment.
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For those of you thinking Long Term, this weekly chart can help with your planning for 2024. There are 2 potential long term Flag Patterns that have formed, one is Bearish and the other is Bullish. From the potential Breakout Points, the length of the Bearish Flag Pole could signal a potential drop to $84 and the Bullish Flag Pole could signal a Rise to $363... To be honest it's just a hunch but unless Disaster hits Tesla the Bearish scenario just does not seam realistic, however a rise to $363 in 2024 is very real as sales begin to ramp up some more... So if the price drops to $223 and you secure a long term position and it hits my target of $363 next year, that's a rise of $140 for a % increase on your investment of 62.3%... I like those odds.... : )
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Well as far as I can see the Dominant Trend remains intact. The Bearish Wedge is most likely a Breakdown although on occasion the pattern fizzles, but I'm of the opinion it won't. I had previously thought $223.00 was the potential however It could hit $219.00 as far as what I'm currently seeing. The higher highs and higher lows are the classic setup and with the MFI Looking to follow a Bearish Divergence, you know what I say, Price follows the MFI and if it's dropping while the price is rising then it's just a matter of time.

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So here we are on December 11th with another down day and the candle just staying inside the bottom wedge line. I thought it was appropriate to show the progression of the currant move. Both the 50 and 200 day ema's will act as support but failing that the next move is still expected to $223.00. I think many investors are and will continue to take profits now through the end of the year putting pressure on the markets as ther's alot of gift buying to be done. A New Year's Rally may not start till January 3rd.

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Not a lot has changed since I last posted, though there was a breakout above the Bearish Dominant Trendline, the overall tone is still Bearish. I am currantly not holding any shares as I believe the share price is at least $30-40 above where it should be at this point in time based as their sales and near term projected revenues.

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A very clear break of the Bearish Rising Wedge. The Fibonacci Lines show some of the potential moves. Personally I believe $228.17 is realistic and $218 likely oversold but with any other bad news $205 has potential. I just charted the NDX 100 and believe a Market pullback over the next 3-4 months is possible and Tesla will move with the market.

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As in the Chart above there is a Long Term Inverted Head & Shoulders Pattern that has yet to finish playing out however the Bearish Short Term Rising Wedge is just a continuation of what I have been saying for several weeks now and though it is showing a worst case scenario at $197.00 that would confirm as a recent double bottom should it happen as the price had hit at that point at the end of October. Trade this carefully, don't rush into anything as Patience will be rewarded.

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Here's something to keep your eyes on in the Chart above. This Bottom Signal is usually 98% accurate when it forms. See the chart values on November 1st for the PPO and the ADX. I'm looking for them both to pull together again to signal a bottom. Usually a PPO of minus 8 to minus 10 or lower with an ADX of plus 22 or higher to +30. It doesn't happen often but when it does it's usually a significant move.
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Looking at this weekly chart should really clear up any misunderstandings as to what I've been projecting. This really shows greater downward potential to some of my previous targets that I projected. Even with the Financials close approaching if there is a bounce I believe it to be small and short lived with a return to the downward trend. I'm just not seeing anything Bullish that is sustainable.
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On the previous 4 occurances when the MFI was oversold at or near this current level the Price subsequently moved up a minimum of 25% however each time presented a differant set of circumstances and on this occasion there appears to be more bad news than good... Is it possible that Tesla will still show an earnings surprise and the Price will bounce on Wednesday next week or will this be the exception to the year and the price remains oversold for a longer time period?
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This chart is a tough read. Overall it is still very bearish however with a 76% retracement from the recent high I'd have to say it may be tradeable for some short term gains to the upside. The big question however is how to mitigate your risk. The price may rise $15 in the next 3 days and then after the financials could drop $20. Buy the Rumour and Sell the news? With the MFI also having bottomed out as well as the PPO and ADX indicators pulling together this could now be the turn around we want, however, Musk has now opted out for further Price cuts and is looking for a huge Payday with Tesla in order to scale up SpaceEx. If the BOD decides to give him the payday he wants, will the Investors Love it and send the stock soaring or hate it because it increases the Float and dilutes the shares even further? Right now the 200 day EMA is at $233.00 and the 50 day EMA is at $236.... they are pretty darn close and if the 50 crosses back over the 200 that is considered a Death Cross and could see Tesla fall well below $200 possibly back to $167... So do you take a risk now for a few % or continue to sit this out waiting for a Firm Reversal Confirmation?
The reward is possibly + 12% gains in the short term on a potential run back up to $237.00. If you decide to buy set very tight stop loss settings on your trade. If it does a hard reversal and you're out at a small loss that would even be considered a benefit because if the Death Cross forms you'll easily make your money back buying in even lower. I would NOT average down Ever. Trade well, and Always Protect your Capital.
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Looking at the near term for Tesla there could yet be a small bounce from the current level based on the Money Flow Index being way over sold and with any Good News and/or surprises that may be anounced out of what may already be expected.
The True Strength index however is showing that the Bearish trend is going to maintain it's current strength and the Death Cross is looming closer to form within the next 1-2 weeks and if it does my relatively short term targets are flagged on this chart and coincide with lines of support and resistance from 1 year back.
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First of all I want to draw to your attention that in the 2 charts immediately below you I am showing a Long Term Triangle Pattern that began at the end of April Last year. The longer the Pattern Duration the greater of it's potential validity. As of today there was a Bearish breakout of the pattern AH where the price has been pushed to $195.00. Now having said that imho Tesla would not drop that low unless they were on the verge of Bankruptcy and that'll never happen in my lifetime. Tesla is judged primarily for it's EV's but is way more than just EV's and you don't get to a 1/2 trillion $ valuation for no reason. However it can go lower than the current value and the third chart will show that below.

This next chart is showing the near term potential move for the price. When the Death Cross forms however, there is a definite chance for the price to drop to around $163 before the end of summer but I'll have to reassess each week as additional news may come out.
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So from the chart immediately above I nailed the Potential Near term price channel as the price dropped and is trading around $183 and now I'm again looking at a weekly chart below using Andrews Pitchfork to determine the overall expected direction for the next several weeks. The Red Pitchfork is the Actual expected move and the Green is a Hypothetical move based on a Potential 3rd point using a 100% Fibonacci retracement from the move up that started October 31/23 and ended Dec. 28th with the recent High.
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Here's a little bit of Education in Technical Analysis. Anyone that's been following me will have seen this with my charts. This is the True Strength Oscillator for the Tesla Chart. TSI Shows 3 things. When the Oscillator is above the Centerline the Bulls are in Control and below the Centerline the Bears are in Control. Also it shows Divergence and if you note the circumstance of the drawn Bearish Divergence Line with the Oscilator crossing the trigger line on Jan. 2nd and the 9th over the center line, those were your first two big sell signals. Finally the third area of interest is the depth of the lines at -45, a level not seen since early January last year when the price had bottomed out. One of the confirmation signals that I'll be looking for that a reversal is in progress would be any of those doing the opposite to what we see here now. FWIW it looks like there is good support at the current levels so keep an eye on these as they just might be the confirmation we want to take our position when it occurs. The other signals shown are also ones that I had shown and spoke about days or weeks in advance to be watching out for so anybody following me should not have been caught off guard with the most recent drop in the price Points for Tesla.
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So this latest analysis is following all of my primary indicators and showing where the greatest confluence of arrows up and down are indicating the tradeable trends with greatest potential for profit. Now of course many of you will be saying Hind sight is 20/20 however the big takeaway is that these are not day trades, these are moderate term swing trades of several weeks in duration where you may not necessarily catch the exact top or bottom however on each occasion you could make a minimum of 10-20% and more both UP and DOWN if you are also Shorting. One of the more reliable indicators amongst this group for a reversal is the TSI as you can see however I must stress that it is a combination or confirmation of more than one indicator before taking a new position or selling an existing position to preserve your profits. Right now Tesla looks strong and has been trading as if a bottom may already be made however I want to see a bullish crossover of the TSI oscillator line above the trigger line before taking a position. A further move above the zero line along with the other signals and it would be a Bullish Trend.
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Here's another look at the Weekly chart and so far it's really showing Bearish Signals all over regardless of the current upward movement. A significant Break however above $188 will be a difinitive sign of a trend reversal that will be more visible on the Daily Chart. On my latest chart above from yesterday the primary direction was showing as Bullish but it's just the strength of the movement that I've yet to determine as to whether it'll run or fizzle.
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TSLA For those of you following me I trade with some fairly strict parameters to protect my capital however I did say a solid close above $188 and I will be taking a new position so possibly this week. Though the Weekly chart is very bearish yet overall the daily chart shows a Bullish Bias with more potential upside. The TSI indicator is one of my main triggers of several and is starting to look more convincing of a new trend but not yet conclusive. All but the worst of my downside targets have been met and with 1900 Institutal Investors backing Tesla there was Very Strong Support at $180.00 so for now I'm calling a bottom at that level and let's see if this keeps Creeping back up to the targets in black that also act as Resistance, though a Retest of the recent lows is still possible. Trade carefully.
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I've decided to take a new position with Tesla as I called the bottom at $180 and believe there is more upside potential than down at this point. Most of my indicators now are bullish and gaining strength and yesterdays candle moved above the 7 day ema for the first time in 5 weeks. As well, Tesla likes to swing above and below the 50 day ema so there is a likelyhood that it should move back up to the $217 level within the next several weeks.
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