Tesla has obviously been a major growth stock in 2020, but the chart may be showing some fatigue 12 months after its blistering rally began.
First and most important was the muted reaction to Wednesday’s better-than-expected quarterly report. The biggest takeaway seems to be concern about another capital raise more than the results. After all, TSLA has yet to reclaim its previous highs from the last stock sale in early September.
Next, MACD has trended lower ever since its euphoric peak after the stock split. That suggests momentum is powering down.
Third, you have the 50-day simple moving average (SMA) and upward trend line starting in late June. TSLA’s on pace to close below both today for the first time in several months.
Finally, volume has been waning as the range tightens. This creates the risk of a stampede out if stop losses begin to trigger.
One last potential issue with TSLA is the relative strength in other names like
GM
and
F
. There’s a growing sense that 2021 could bring strong auto sales (given the average age of existing vehicles). If that happens, we could see a rotation back to traditional names.
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First and most important was the muted reaction to Wednesday’s better-than-expected quarterly report. The biggest takeaway seems to be concern about another capital raise more than the results. After all, TSLA has yet to reclaim its previous highs from the last stock sale in early September.
Next, MACD has trended lower ever since its euphoric peak after the stock split. That suggests momentum is powering down.
Third, you have the 50-day simple moving average (SMA) and upward trend line starting in late June. TSLA’s on pace to close below both today for the first time in several months.
Finally, volume has been waning as the range tightens. This creates the risk of a stampede out if stop losses begin to trigger.
One last potential issue with TSLA is the relative strength in other names like
GM
and
F
. There’s a growing sense that 2021 could bring strong auto sales (given the average age of existing vehicles). If that happens, we could see a rotation back to traditional names. TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
