Hey everyone in stock market land and Internet city! I hope you’re doing amazing! I am traveling back down to GA again this weekend. My Dad’s 72nd birthday was on 9/24/14 so I will make sure this is a special one to remember. I’ll be driving down in my legendary Toyota Corolla. Gets great gas mileage but it’s about as vanilla as it comes. I plan on trading it in as the New Year approaches. I truly don’t believe vehicles are great investments, so I plan to stick with a Corolla. I’ll just get a newer one. However, if a few trades really go my way, who knows? I might get a TSLA.
On the subject of TSLA, I had a friend and another TraderPlanet commentary writer, Steve Burns, request my overall view point of this fast moving, electric stock. I’ll give my overall sentiment at the end. Here are 8 takeaways from the chart.
#1 There is a strong resistance zone between $255 and $265. This is where short sellers (institutions and individuals alike) camped out to short sell $TSLA, as well as the location a lot of previous buyers sold to lock in profits.
#2 A higher high was made with some great candles and volume at the end of August and into the beginning of September.
#3 TSLA has been making higher highs and higher lows since May / June 2014. The $250-ish price point could simply be another higher low.
#4 TSLA is currently trading above the 100 simple moving average {the blue line} and the 200 simple moving average {the red line}.
#5 TSLA had a breakout in late August with a gap up, some sideways action for 9 days and then a gap down. These gaps appear at almost exactly the same price.
#6 The above pattern happened at an all-time high. Since the gaps are at the same level, this is indicative of a chart pattern called an ‘island reversal,’ and can be quite strong.
#7 The candles on 9/17 – 9/19 appear to be a bearish flag on TSLA, giving it momentum to continue lower.
#8 The 9/22/14 candle opened and closed lower than the open and close of the prior day. That’s some serious bearish sentiment.
Bottom line on TSLA is I’m pretty torn, which usually means wait it out until things become more clear. I’m more bearish than bullish for the next 1-3 weeks if the 9/15/14 gap doesn’t fill anytime soon. I do expect some lower lows and lower highs on $TSLA, which could give a great buying location around $230 and or $195 if it makes it down that low. If I were to engage in any specific trades the next 1-3 weeks, they would be some type of non-directional strategy that involves option selling. Either way, I’m expecting some fascinating and volatile moves on $TSLA in the near future!
Enjoy your upcoming weekend, friends!
