TSLA between November 21 and May 22 formed a rather large S/R Zone of 207.64 points (between 206.86 – 414.50).
At the current date, September 23, 2022 (before open), the stochastic should be set at 11 periods on the monthly. There have been 11 bars in the formation cycle of this zone. When October begins, the stochastic should be increased by 1.
There also exists a smaller zone of S/R within the larger zone. This exists between 206.86 – 318.50, a difference of 111.64 points. The current stochastic for this zone is set at 5 periods. When October begins and if the prices don’t leave this zone, it should be increased to 6. The shorter stochastic is currently at 73.21 or 73.21% of the zone.
(The difference between the S and R) 111.64 * .7321 = 81.73 + 206.86 (The support value) = 288.59 (Current close on September 22, 2022)
Usually any value above 70 (or 70%) indicates the potential challenge of the highs. In this case, the high that may be challenged is 318.50
Securing a close/break (possibly in October) over 319.14 (318.50 * 1.002), could indicate that TSLA will attempt to challenge other higher prices currently in it’s establish long term S/R Zone. The first challenge would be to the 352.21, the 70% position of the current long term S/R Zone.
Should a future close above 352.21 (while maintaining the current long term S/R values of 206.86 – 414.50) occur, this would place the stochastic over 70% and indicate a challenge to potentially three other high price positions.
1) April high of 384.29
2) January high of 402.67
3) Finally the S/R high from November 2021 of 414.50.
The current bar as of close September 22 is a bearish bar with a lower high than previous bar and a lower low than previous bar.
The current September 22 closing position is at ~ 47.54% of the monthly range ( C – L / H – L ).
This is an indication that prices currently do not know which direction to go in. Translating into a 50/50 chance of either direction (if today was the last day of the month).
A close below 280.16 would suggest further bearish or declining prices with a potential decrease toward 240, while a close above 299.38 would suggest a renewed increase in prices with a potential upward move toward 338 (preparing to challenge the April high).
This is the second time in 5 months that the stochastic has moved above 70. The first time was July 2022 with a Stochastic setting of 3 (three period of S/R formation), the Stochastic reached 80.88 and challenged the high of 318.50 only to be rejected at 314.67.
Should the prices fail to secure above 319.14, a close or movement below 269.15 would indicate that the lows are going to be challenged.
The strongest value to reject this movement would be 216.17 unless all the buyers dry up, the economy go to hell/recession/crisis, than we would be potentially in a price decline toward 134.
IF I were to trade LONG TSLA today, I personally would wait for prices to secure themselves above 319.14. My entry orders would be set at this value.
Yes, the current prices are a discount to 319.14, however there is no discount if you buy in while prices are weak/declining – only losses.
At the current date, September 23, 2022 (before open), the stochastic should be set at 11 periods on the monthly. There have been 11 bars in the formation cycle of this zone. When October begins, the stochastic should be increased by 1.
There also exists a smaller zone of S/R within the larger zone. This exists between 206.86 – 318.50, a difference of 111.64 points. The current stochastic for this zone is set at 5 periods. When October begins and if the prices don’t leave this zone, it should be increased to 6. The shorter stochastic is currently at 73.21 or 73.21% of the zone.
(The difference between the S and R) 111.64 * .7321 = 81.73 + 206.86 (The support value) = 288.59 (Current close on September 22, 2022)
Usually any value above 70 (or 70%) indicates the potential challenge of the highs. In this case, the high that may be challenged is 318.50
Securing a close/break (possibly in October) over 319.14 (318.50 * 1.002), could indicate that TSLA will attempt to challenge other higher prices currently in it’s establish long term S/R Zone. The first challenge would be to the 352.21, the 70% position of the current long term S/R Zone.
Should a future close above 352.21 (while maintaining the current long term S/R values of 206.86 – 414.50) occur, this would place the stochastic over 70% and indicate a challenge to potentially three other high price positions.
1) April high of 384.29
2) January high of 402.67
3) Finally the S/R high from November 2021 of 414.50.
The current bar as of close September 22 is a bearish bar with a lower high than previous bar and a lower low than previous bar.
The current September 22 closing position is at ~ 47.54% of the monthly range ( C – L / H – L ).
This is an indication that prices currently do not know which direction to go in. Translating into a 50/50 chance of either direction (if today was the last day of the month).
A close below 280.16 would suggest further bearish or declining prices with a potential decrease toward 240, while a close above 299.38 would suggest a renewed increase in prices with a potential upward move toward 338 (preparing to challenge the April high).
This is the second time in 5 months that the stochastic has moved above 70. The first time was July 2022 with a Stochastic setting of 3 (three period of S/R formation), the Stochastic reached 80.88 and challenged the high of 318.50 only to be rejected at 314.67.
Should the prices fail to secure above 319.14, a close or movement below 269.15 would indicate that the lows are going to be challenged.
The strongest value to reject this movement would be 216.17 unless all the buyers dry up, the economy go to hell/recession/crisis, than we would be potentially in a price decline toward 134.
IF I were to trade LONG TSLA today, I personally would wait for prices to secure themselves above 319.14. My entry orders would be set at this value.
Yes, the current prices are a discount to 319.14, however there is no discount if you buy in while prices are weak/declining – only losses.