Opportunity and peril in Tesla’s stock are ahead.
Let’s explore the issue with a chart.
Please click here for an annotated chart of Tesla TSLA stock. Please observe the following from the chart:
• The chart shows a key psychological level of $300 drawn in white.
• The chart shows a support zone drawn in yellow around the key psychological level.
• The chart shows Tesla Whac-a-Mole. Lately when there is bad news for Tesla, buyers step in around $300, often driving the stock higher. In the past month, investors drove the stock to $357.
• The chart shows that Tesla’s stock is below the 200-day moving average. There is no magic by itself to the 200-day moving average. However, many investors believe that a stock trading below that level is bearish. Sometimes this belief on the part of a large number of investors becomes a self-fulfilling prophecy.
• As the chart shows, the volume spikes on down days. This is bearish.
Believing the technicals
Traditional technical analysis does not work as well as it used to. For the reasons, please click here.
Technical analysis should always be supplemented with other means. As an example, the ZYX Change Method has six screens. Only one of the screens is technical analysis. Only 50% of the technical analysis screen comprises traditional technical analysis. The other 50% consists of new, innovative algorithms that give investors an edge. Investors need an edge to succeed in the long run.
Tesla primarily trades on technicals and sentiment, not on fundamentals. The highest value we have been able to assign Tesla at The Arora Report based on the quantitative screen of the ZYX Change Method is $240…..Read more at MarketWatch.
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