The market has gone wild, fueled by Fed policy, low interest rates and manic crowds. No matter what, the market always has a rhythm, and except specific situations, stocks return to their mean. In my case, this is represented by the 34 day EMA Wave, that is what I consider mean/value.
On the weekly chart, Tesla has overshot the Wave by more than 100%. As you can see, not a long time ago, Tesla was sitting 140% above value (in this case value has nothing to do with the underlying fundamentals, it is strictly an instrument of technical analysis), so we should never underestimate crowd mania.
The Force Index has overshot its channel for the second time, the MACD histogram started ticking down, turning the impulse system blue. Last week's candle, screaming indecision, has a very wide range and can certainly prove to be a top, at least for some time.
On the daily chart, we have a Force Index overshoot, but that has been corrected already; without the weekly chart, the daily chart does not say much. One thing stands out though: Tesla has risen 83% because of a stock split!
I think this can be an intermediate top for Tesla, and a drop toward 200$ wouldn't be a surprise. I am not a stock shorter, and this chart is exactly the reason why; with a few exceptions, you would go bankrupt shorting Tesla.
However, if I would own any Tesla, I would run!
On the weekly chart, Tesla has overshot the Wave by more than 100%. As you can see, not a long time ago, Tesla was sitting 140% above value (in this case value has nothing to do with the underlying fundamentals, it is strictly an instrument of technical analysis), so we should never underestimate crowd mania.
The Force Index has overshot its channel for the second time, the MACD histogram started ticking down, turning the impulse system blue. Last week's candle, screaming indecision, has a very wide range and can certainly prove to be a top, at least for some time.
On the daily chart, we have a Force Index overshoot, but that has been corrected already; without the weekly chart, the daily chart does not say much. One thing stands out though: Tesla has risen 83% because of a stock split!
I think this can be an intermediate top for Tesla, and a drop toward 200$ wouldn't be a surprise. I am not a stock shorter, and this chart is exactly the reason why; with a few exceptions, you would go bankrupt shorting Tesla.
However, if I would own any Tesla, I would run!