Tesla Price Predictions
Troubled Waters Ahead
Some major selling took place last week in the markets. The selling was especially pronounced with Tesla as its share price has fallen over 12% in the past 6 trading days.
From a technical standpoint, it looks like there will be more downside in the near future. But I wouldn't be surprised if we see a small rebound in price, or at least a consolidation period, before the selling continues.
Is the Rally Over?
TSLA has been in a strong uptrend throughout this whole year. When you look at the medium-term trend, you can see that the price is near a major inflection point.
In the charts directly below, you can see two interrations of the current uptrend using weekly candles. In both cases, the price is near the support of the trend.
If the price continues to fall and dips well below support, then this would signify that the trend is changing.
If there is a change in the trend, then the trend you see in the chart directly below would be the next potential trend to keep an eye out for.
Of course, this is just a theoretical trend that would only be confirmed if the price rebounds off of the theoretical support.
Short-Term Bearishness
When you look at the short-term picture, it is an apparent downtrend. It almost looked like TSLA was breaking out to the upside. It was a false breakout. Lower highs have been confirmed in the technicals.
After the major selloff last week, it appears that the price will return to the downward consolidation it has been in since making 52-week highs.
Sometimes, the trend can expand or morph into a slightly different channel. This might not be the case in this instance, but it could pay off to keep this in mind. I have highlighted the possible new expanded trend in the chart below.
The oscillating indicators are turning over and moving into bearish territory. This could imply more selling in the near term.
When WIll it Rebound?
Technically speaking, things are looking bearish at the moment. I think there will be more selling very soon. So the next question is, where will the price rebound?
Directly below, I have highlighted the nearest Fib levels where some possible support could be found. Personally, I think there will be more downside in the current correction. But these Fib levels could make good areas for entries and exits during daytrading.
The horizontal trend lines in the chart below are the main areas I am watching for potential support. The lower Fib levels are very strong support levels to watch.
The medium-term trend is implying even more downside than these trend lines are showing. But there are a lot of levels that could slow the descent so the selling could last a while if this downtrend holds.
Conclusion
I think there is at least one more leg to the upside in this medium-term rally. But I think there will be more selling in the near term.
I will be following the short-term trend in the assumption that the price will approach support once more. So until something shows me otherwise, like a positive technical development or catalyst, then I will remain bearish in the short term.
Do you think TSLA will make lower lows than the trough printed last month?
As always, this is not investment advice. Good luck trading. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Give your investments time. Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend.
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terryjeanvivier : without permission
rawrrrbucks terryjeanvivier: ??????
SpyderCallOP rawrrrbucks: I didn't get it either.
Silverbat : Appears extremely oversold?
MonkeyGee : I can see it reaching 36
jean yang MonkeyGee: Is Tesla still worth buying?
SpyderCallOP MonkeyGee: that would be crazy
would you scoop some shares up at 36?
Nicholas Low Silverbat: How does an over valued stock be considered oversold ?
SpyderCallOP Nicholas Low: just look at the daily candles with an oscillating subindicator like RSI. Most people use RSI when they are referring to oversold conditions. When the value of RSI on the daily candles is near 30 or less, then it is considered oversold.
I published an article about RSI a long time ago. Copy and paste this link to check out the post.
SpyderCall :Overbought And Oversold
https://www.moomoo.com/community/feed/108231513341957?global_content=%7B%22invite%22%3A%2270107943%22%2C%22promote_content%22%3A%22mm%3Afeed%3A108231513341957%22%7D&data_ticket=503374bcb16985dbcf5d859821fc6dab
SpyderCallOP Nicholas Low: But to answer your question further, a stok is considered overvalued based on valuation metrics. A stock can remain overvalued for a long time. But overbought or oversold conditions are relative on a shorter time frame. Stocks can't go straight up or straight down. Because of this, you will see small swings up and down within the longer-term trend. To make it easy to understand, you could say that these small swings within the larger trend are caused by overbought and oversold conditions.
Also, remember that overbought and oversold conditions only pertain to price action and have nothing to do with company valuation.
To learn more about how companies can appear overvalued, click on the company tab, then click the company valuation section, then click the question mark in the top right corner to get an explanation about each valuation metric.
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