To The Moon

$Tesla Motors(TSLA)$ I have never been a fan of Tesla, so I can be biased in any form of argument with respect to Tesla. To avoid this, I will do this post solely from chart or technical point of view.

As I can only use a maximum of 3 photos in a post, this is how I will frame my analysis. I might write a separate article on Tesla depends on the reactions to this post... If I find for example too many eggs in my face 😈, another topic of interest for another day might be suitable [Happy]  

Without further delay in this Halloween 🎃 night, the 1st primary chart is a weekly chart, secondary chart below is RSI. If you have followed my posts from long time ago, you will know that RSI or relative strength index measures whether the primary chart is in overbought or oversold territory.

A few things to note here in the 1st chart. I have adopted a Moving Average (MA) indicator in the primary chart. We can see in the weekly chart that a death cross has just formed. I have checked the daily chart (not shown), there is still no death cross. What does this mean? A death cross often signals a significant downtrend formation. 

Now that is occurring in weekly and not daily simply means that the significant downtrend is avoided in the short term. However, it is a self-fulfilling prophecy. It might just be that in the short term, while rebounds are probably expected, these won't last. The mid term outlook from technical perspective is not bright. If the downtrend does continue despite occasional rebounds (known as dead cat bounce), a death cross would like appear in the daily chart before long.

Indeed, looking at RSI in the 1st chart shows that the stock is neither overbought or oversold. However, looking at the daily chart (3rd chart), it is definitely oversold. But, the usual word of caution that the price could stay oversold for longer. RSI just indicates that a rebound is imminent, not when. 

I have included MACD as the secondary chart in the 2nd (weekly) chart. The chart is beginning to trend downwards. MACD or Moving Average Convergence/ Divergence is just another momentum indicator to identify potential trend movement. It just confirmed our earlier assessment that middle term trend has turned down for Tesla stock price.

What do we do with the above information?

I drew two horizontal lines in the charts below, one light green (201), the other pink (162). 201, or support was broken easily. 162 is the other clear support line. There is one other weak support line around 187. If 162 is broken (which I don't so in near term - 187 is more likely), I don't see any other clear support until all the way to closer to 110.

Like I mentioned earlier, I think the pink line will hold in the short term. Tesla should probably test 187 and bounce back towards 201. However, from the middle term point of view, I won't bet on Tesla to hold these ranges. 

I will just sit and watch the drama unfold... It may be a matter of one or two quarters. It might be close to a year to see the break of 162. If it indeed comes that time, panic will set in and the obviousness of the death cross will be clear for all to see...

Just my 2 cents. Do your own HW before committing... Especially to a share that is as volatile and as emotionally charged as Tesla.

@LMSunshine  @Tigress02  @CaptainTiger