Wednesday, after the close, Tesla Motors reported earnings. The results were impressive by any measure, and projections were in line with our expectations. However, in the aftermarket, the stock fell as the reported numbers were below the whisper numbers. The earnings report and the conference call provided a lot of details, but these details are simply noise, both from the perspective of the long-term investor and the short-term trader. So, where does that leave us regarding price?
Let us start out by taking a look at the daily chart.
The chart shows that Tesla TSLA stock was already in a downtrend prior to the earnings release. On the left-hand side, the red candle shows a steep fall mostly after the earnings release. As the chart shows, the stock fell to the top of the support zone. At The Arora Report, we calculate support zones based on money flows from tick-trading data. We find these to be the most reliable. The background colors on the chart are the composite of some of our algorithms; green indicates positive, maroon indicates negative and blue indicates neutral.
Traders may want to pay attention to the 200-day simple moving average, which is at about $175. From a rational perspective, there is no significance to the concept of 200-day simple moving average. This is simply a vestige of years gone by when there were no computers, and investors had no choice but to do analysis manually. A 200-day simple moving average was easy to calculate manually and provided a rough approximation of the support level. However, the 200-day simple moving average is important here because many people still believe in it and act on it, therefore sometimes, it takes on a life of its own…Read more at MarketWatch