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Fan Yang

Tesla (TSLA) Will Likely Break Below Range Support of $240

Tesla $TSLA remains in a range that has been in place for almost 3 years before $240 and $390. But as price approaches $240,  I think we should NOT rely on the range support anymore. 

TSLA Daily Chart

(click to enlarge)

Rejection at the Mean:
- In September, we saw price rebound before reaching the range support.
- However, price subsequently failed to push above the moving averages (200, 100, 50). 
- This cluster of MAs represent the mean price action. 
- The rejection here suggests the market has turned bearish. This is called a bearish slingshot.
- Also note that the RSI held under 60, which reflects maintenance of the recent bearish momentum created in August. 
- The price action-MA-RSI dynamic suggests bears are in control and we should probably NOT rely on bulls defending the $240 range support. 
Bearish Outlook:
- If indeed price breaks below $240, TSLA would likely have downside to $200. 
- For now, we should probably cap our bearish expectation to the key support pivot around $178. 
- Meanwhile, we should start to anticipate resistance if price comes back towards $300. 

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