To The Moon

$Tesla Motors(TSLA)$ 

Tesla, Inc. (NASDAQ:TSLA) is currently the 14th largest component of the S&P 500 (SPY) with a market capitalization exceeding $350 billion. From its all-time high of $414.50, the stock has crashed over 70%. Although the stock appears likely to decline further over the next 6-12 months, present conditions are extremely oversold. This makes TSLA attractive for a short-term buy, and I would target $127 to $130 for a short-term bounce.

Clear intermediate downtrend intact

We can observe that the intermediate downtrend is getting stronger since the weekly Average Directional Index, or ADX, for TSLA is above 25 and rising. A rising ADX figure above 25 implies the prevailing trend is getting stronger. At the same time, price is 'oversold' according to traditional parameters for the weekly Relative Strength Index, or RSI. The last time weekly RSI reached a similar oversold condition was the 2019 bottom of $11.80. This does not necessarily mean that TSLA's price is currently making a long-term bottom. Instead, it means the chances of a sharp counter-trend reversal are improving.

Extreme oversold conditions in a daily timeframe

We can see that TSLA has reached an extreme oversold condition, with daily RSI at just 16.41. We can also observe a confirmed downtrend, given the rising daily ADX is well above the threshold of 25.

Extreme oversold conditions in the daily timeframe usually precede a sharp countertrend move. The more extreme the oversold condition, the more extreme the reaction is likely to be. However, such conditions do not necessarily mark a long-term bottom.

Another indicator that suggests we may be close to a countertrend reversal is the daily MACD. Although this indicator clearly shows an acceleration in downward momentum, the length of the histogram bars is currently shorter than the last major correction in October. This creates a bullish divergence that usually indicates that a countertrend reversal is close.

Tesla stock price up 1.12% on Friday

(Updated on Dec 30, 2022)

Sell candidate since 2022-12-01 Loss -36.73% PDF

On Friday, 30th Dec 2022, the Tesla stock price increased 1.12%, going from $121.82 to $123.18. This marks the fourth consecutive day of gains. The stock fluctuated 3.95% throughout the day, with a low of $119.75 and a high of $124.48. Over the last 10 days, the price has dropped -21.87%, and the volume of shares traded decreased -62 million on the last day, totaling 156 million shares for a total of $19.26 billion. A decrease in volume on higher prices may indicate a potential change in the near future.

Here's how to buy TSLA stock if you're new to investing.

The stock lies in the middle of a very wide and falling trend in the short term and further fall within the trend is signaled. Given the current short-term trend, the stock is expected to fall -40.20% during the next 3 months and, with a 90% probability hold a price between $62.10 and $96.62 at the end of this 3-month period. Do note, that if the stock price manages to stay at current levels or higher, our prediction target will start to change positively over the next few days as the conditions for the current predictions will be broken.

TSLA Signals & Forecast

There are mixed signals in the stock today. The Tesla stock holds a buy signal from the short-term moving average; at the same time, however, the long-term average holds a general sell signal. Since the longterm average is above the short-term average there is a general sell signal in the stock giving a more negative forecast for the stock. On further gains, the stock will meet resistance from the long-term moving average at $165.58. On a fall, the stock will find some support from the short-term average at $121.84. A break-up through the long-term average will give another buy signal, while a fall below the short-term average will add another sell signal and strengthen the general signal. Furthermore, there is currently a sell signal from the 3 month Moving Average Convergence Divergence (MACD). A buy signal was issued from a pivot bottom point on Tuesday, December 27, 2022, and so far it has risen 12.91%. Further rise is indicated until a new top pivot has been found. Volume fell during the last trading day despite gaining prices. This causes a divergence between volume and price and it may be an early warning. The stock should be watched closely.

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Support, Risk & Stop-loss for Tesla stock

Tesla finds support from accumulated volume at $121.82 and this level may hold a buying opportunity as an upwards reaction can be expected when the support is being tested.

$121.82 $123.18 $125.35

This stock may move very much during the day (volatility) and with a very large prediction interval from the Bollinger Band this stock is considered to be "very high risk". During the last day, the stock moved $4.73 between high and low, or 3.95%. For the last week, the stock has had daily average volatility of 6.57%.

Tesla is oversold on RSI14 (17). Some stocks may drop long and hard while being oversold on RSI before turning, which increases the general risk.

Our recommended stop-loss: We hold a negative evaluation for this stock. No stop-loss is set.

Trading Expectations (TSLA) For The Upcoming Trading Day Of Tuesday 3rd

For the upcoming trading day on Tuesday, 3rd we expect Tesla Inc. to open at $122.47, and during the day (based on 14 day Average True Range), to move between $113.31 and $133.05, which gives a possible trading interval of +/-$9.87 (+/-8.01%) up or down from last closing price. If Tesla Inc. takes out the full calculated possible swing range there will be an estimated 16.02% move between the lowest and the highest trading price during the day.

Since the stock is closer to the support from accumulated volume at $121.82 (1.10%) than the resistance at $125.35 (1.76%), our systems sees the trading risk/reward intra-day as attractive and believe profit can be made before the stock reaches first resistance.

Insiders are very negative selling more shares than they are buying in Tesla

In the last 100 trades there were 72.68 thousand shares bought and 41.64 million shares sold. The last trade was made 5 days ago by Kirkhorn Zachary who sold 13.5 thousand shares. In general the insiders are selling more stocks than they buy. There can be a variety of reasons for this, but in general it can be considered as a negative signal.

Conclusion and Actionable Stock Buying

Major support at $113 and $93

TSLA has support at $113.22 according to a Point and Figure chart that uses a 4% box size and 3-box reversal configuration. Only a daily close below $108.87 would break this support level. This level coincides with a previous resistance level that TSLA broke on its way up to new all-time highs, which adds to the significance of this level.

If TSLA breaks the $113.22 support level, the next support level in this configuration would be $93.06. Given the sharp drop between the two potential levels of support, it makes sense to place a stop-loss in the $106 to $108 range to protect capital from another sharp drop in the share price.