Tesla Makes a Key Reversal but Does Elon Musk Even Care?
Investors take note, this is a pattern that leveraged futures traders do not ignore.
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Tesla TSLA is one of the most closely followed companies and one of the most closely followed stocks. I don't know about robotaxis and Cybertrucks so let's drill down on some short-term charts to get a look at what technically oriented traders look at.
In the daily bar chart of TSLA, below, I looked at just the past month of activity. Prices made a new high for the move up Thursday morning and have turned sharply lower.
TSLA has broken below the lows of the past four trading days. This is what a "key reversal" looks like and is a pattern that leveraged futures traders do not ignore. Anyone who bought TSLA in the last four days is now "under water" with a mark-to-market loss.
In this second chart of TSLA, below, I used Japanese candlesticks and this chart shows me a pattern called eight to ten record highs before the doji of Wednesday and the large bearish (red) candle of today.
Prices got extended on the upside with a long series of bullish (white) candles and that makes things vulnerable to a reversal.
In this daily Point and Figure chart of TSLA, below, I used percentage changes to plot the X's and O's. This shows that prices reached and exceeded a target in the $233 area.
In this second Point and Figure chart of TSLA, below, I used the average true range (ATR) to plot the moves. Here it points to a price target in the $148 area.
Bottom-line strategy: Not everyone believes in technical analysis so Thursday's downside reversal may not get "traction" in the financial press. The media likes to have a story behind the price moves. Traders just want to make money and don't care all that much about the story.
What do you think?
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