Well I called it just about perfectly this time with my previous Chart "Drop and Rally" indicating for a bottom today of $177.00 followed by a subsequent Rally. Today's candle formed a bottom reversal and now I believe we'll see at least 2-3 more days of Rally moving towards the Q1F's before the Bears try to take it over and Short Sell once again. The next level's of Resistance are $188.00, $192.00, and $198.00 so it's still not too late to Join the Rally but remember that the idea here is to trade for profits so be prepared that when the trend changes, Take your profits off the table. I'll be following closely and will update my comments accordingly as to when I expect to sell for myself. Right now the CMF has turned up breaking a 2 month long bearish divergence indicating that more money is flowing into the stock than away and RSI has moved into Oversold Territory so it is likely the buying pressure will hold till the second and possibly 3 resistance levels are hit.
Comment:
Well Traders, what a crazy crazy day, though not totally unexpected because I called for a bounce in the morning but I certainly didn't expect it to be so large and then of course with the Bears Piling in en-mass so quickly... Before 9am we were already at 21 million shares traded hands. I can only surmise that an Institutional Investor decided to take a new position that pushed the shares up in pre-market pretty fast and continued until their order was filled. That's when the buying dried up and with a new peak came the Bears. We already new that the standard Bulls were no longer accumulating as evidenced by yesterdays trading action so there was nothing to support the Gap this morning. The pressure was relentless but as per a usual drop from an early morning sell off, I previously suggested to wait for a subsequent rally that we did get. I put in my sell order around 10:30 for $184.85 when the price was already at $182.30 and the price I selected was based on the 200 ma on a 5 minute chart showing $185.15 so I placed the sell just under that. The 200 ma can act very nicely as both support and/or resistance. In my own stupidity I had not placed a Trailing Stop Loss on my position and had I done that I would have been take out near the top today. Live and learn. We're all learning here. I like to explain myself so we all become better Traders. Sorry if I ramble at times. So what may we expect moving forward over the next few days? Well on the chart I have that we are both in a Short Term Symmetrical Triangle as well as a Long term Bull Flag. Usually a breakout from a Symmetrical Triangle is in the direction of the previous trend so in this case, Down. We've yet to get to that point though it could happen as early as tomorrow. Previously I addressed the support and resistance moving up but now we need to look towards a bottom. I can't add to this chart unfortunately, I would have to draw a new one so today I'll just say current resistance is at $178.15, then $174.74 and $167.55. The Long Term Bull Flag sounds like a contradiction to then say between now and Early July we could drop to $144.61 however with Q2 expected to be much better we could then go on a run back above $200.00 as it's always a positive breakout so look to load up on cheap shares. I think we may have some small rally's over the next few days but I don't have any confirmation signals to tell me strength. I'll keep you posted. In the meanwhile if we do drop to as low as $167.55 then I'm all in as the first level of resistance would then be $174.74 and $178.15 going back up. As soon as I see something that we can firmly act on again I will post a new chart.
Comment:
This morning on the idea thread I contemplated that yesterday morning a large Institutioanl buyer was taking or increasing their position as they anticipate vg news next week but pushed the price up too quickly and then backed off causing the price to crash. I went on the speculate that yesterday was a part fill and that they may complete the order this morning. Well once again by 9:30 we had 30 million shares traded but somewhat more subdued so as not to run the price up too quickly again. Subsequently the buying was weak the rest of the day though substantial enough to keep the price up with a mere 113 millios shares traded. Again it's in the Short Seller's interest to let the stock run before they short to maximize their profits. So I suspect Friday and Monday with be Bull Days and then the selling pressure will take hold again before the actual news release for the Q1F's. So now we have fairly strong support below us at $179.80, $174.74, and $167.55. Above us as previously stated is Strong Resistance at $188.00, $192.00 and $198.00. The Relative Strength index is now oversold indicating that we still may see some upside however the Macd is barely hanging in above the zero line and has formed a long Bearish divergence indicating that any rally will be Short Lived. Confirming that as well is the MA Cross, and though not completed yet it is on the verge and will likely show up tomorrow or Monday by the looks of it. So yes we may have a bit more of a Rally but I don't expect at this point for it to have alot of strength. I did also see on the 1 hour chart that an ascending triangle had formed that is a high probability for a bnreakout to the upside in the short term. One final note is to be prepared to take your profits quickly and then flip to a short position if so inclined. You should have Trailing Stops in place for your position if you have one and have a Plan in place whether it's to make $7.00 - $10.00 on this trade and when reached Exit as Tesla seldom run's more than $10.00 before reversing. So if you just got back in in the low $182.00 mark, anything at $190 or above you should already have your finger on the trigger. Any Run Tesla has will be short lived and the only thing that could push it up more than expected would be some form of Financial surprise next week and that at best may give us a couple of more days before It Will Reverse. Overall there is not a lot of Bullish Strength left to prop Tesla up for very long at this level.Don't hesitate to sell at the first sign of weakness.
Comment:
I've Published a new Chart for trading the Q1F's over the next 3 days. I've attached the chart below but you may have to copy the link into your browser to pull up the commentary.......
Todays' Candle formed a Doji meaning Indecision by the Buyers and sellers with generally equal support either way. The Bears really didn't show up en-mass as it's really in their best interest to Sell Short near the top of a Bull Run for them to Maximize their profits. The fact they are not yet involved tells me they too may anticipate a Rally to ensue. We need volume! Once again, I plan on selling at the first sign of weakness having bought back in at $178. As in the chart, Resistance is at $188.00, $192.00, and $198.00. I hope to at least reach level 2 before selling but I will sell if something Bearish appears sooner than later whether it's tomorrow or later this week.
One last thing... TAKE your profits. Trade the trends. Don't ride this thing up and down all the time. Learn to pull the trigger. The more often you do it the easier it gets and you'll bank more profits but don't get greedy trying to get the absolute top or bottom of a run because many times you'll be left behind. Set your buy and sell orders just above or below the actually price point in the direction of the trend to make sure it gets triggered.