Has Tesla lost its mojo?

Even though I’m a long-term Tesla bull, I’m afraid TSLA is headed much lower.  That said, I’m also a short-term trader and in the near-term I see a bounce underway, so I’m long TSLA common.

Tesla reports earnings on February 10th. Key share price drivers include updates on the pace of the Model X ramp up, updates on Gigafactory and the battery storage business, and guidance about whether the company will be cash flow positive in the first quarter under the new CFO.

Meanwhile, CEO Musk made a pre-earnings ‘statement-of-confidence,’ increasing his ownership stake by $100 million. He paid cash for the $6 options and $50 million in taxes, which is a bold and noble gesture. He now owns 28% of the company.

Tesla shares did not participate in last Friday’s market bounce, but they did manage a delayed bullish reaction on Monday, printing a ‘double bottom’ engulfing candle pattern. Shares are now probing the psychologically important $200 level from below.

I’m expecting a general market rally this week, and if we get one it should provide some cover for TSLA to move up to the $207 level (red dotted line on chart.) This is a High Volume Node target for a short-term trade. The high short interest notwithstanding, this is a modest target and it may not be exceeded unless the broader market ignites to the upside.

If my long-term bearish thesis plays out for the overall market, I would then  expect TSLA to stair-step down the support ladder to perhaps $122. That level is a line in the sand for the stock… if it breaks below $122 then it could fall all the way to $34, which is the long-term Volume Profile Point of Control.

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It would, however, require a full-blown uber-bear market for that doomsday scenario to play out.

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