My broadening price pattern for TSLA has really helped me over the months/years trade the name … we are back at bottom support and I think a break of that level will spell the death knell for the Company as the convertible debt due in March (I think it is for $900 million) is going to be what brings the company down finally.
TSLA Daily Chart
$300 is the magic number … Can you say “bankwupt”?
I last wrote about my short in TSLA on March 1st (click here) … I still have my September monthly TSLA $350 Puts and I continue to write OTM puts and calls while I wait for the real big push lower down into the next obvious level of support. Here is an update of the charts.
TSLA Weekly Chart – as posted on March 1st
TSLA Weekly Chart – current
The weekly chart has not really started its next major push lower yet, but this week’s candle will be making a new lower low out of the consolidation activity since that March 1st date. The daily and 195-min charts look like the next expansion phase lower could be happening once we get the March monthly OpEx behind us.
TSLA Daily Chart
You can see that the daily ATR support price is at $324.06 … TSLA is trading today below the $323 level so it is likely that the daily ATR support level is going to be broken with today’s close. The R/S indicator also looks like it is going to give a sell signal some time in the near future. I like to see price and relative strength confirming each other.
TSLA 195-Minute Chart
None of the operational data that has been announced this month has really supported an operational turn around at TSLA … lots of senior management have recently left TSLA and that typically is not a great sign/signal for bullish equity investors. The next major event for TSLA will be the quarterly auto sales figures … they are typically released within the first 5 days after the quarter ends, so that should make the start of April a pivotal one for the battle between the bulls and the bears in TSLA.
I have been waiting for the right time to begin shorting TSLA again, and today is the day where I decided to begin. Here is how TSLA’s weekly chart looks to me …
TSLA Weekly Chart #1
The weekly chart has been in a position of ATR resistance for quite a while now … while that has been the condition, relative strength vs the SPY has made a nice looking bear flag or pendant/wedge pattern, and money flow continues to leave TSLA. I think this week has a nice chance to be a pivot candle for price to begin heading lower in earnest. The early February weekly candle was the warning shot and I was waiting for a failure bounce to the upside to begin a put position and begin getting more active at shorting the stock outright (especially intra-day).
Price has hugged the median line from the broadening price pattern and to me it looks like we could be about to break lower and head down to the lower support line as a first real support level.
TSLA Weekly Chart #2
So price made a nice bounce right into the SLOT resistance zone and now it is likely, in my eyes, to begin the next leg lower. Will that be the “C” wave of an ABC correction pattern, or will it be the next major leg in the death knell of TSLA, i.e., the 2nd wave of a bigger 3-wave pattern. If it is just a ABC, then price will likely find support around $265 … if it is a bigger move lower, then $230ish is the likely bigger support level.
TSLA 195-Minute Chart
We didn’t go on to make a new higher high before we look like we made a second break of ATR support … this is the “double-crossover” I like to see when trying to catch inflection points. The 195-min candle closed a couple of minutes ago and it is still holding on … the next candle closes at today’s cash market close (4pm – $336.10).
TSLA 65-Minute Chart
The 65-min chart is in the position of resistance now and Tuesday’s high ($359.99) will not be broken if my price structure read is correct.
Nothing in my following of TSLA’s fundamentals makes me think that we are going to see a great 2018 operationally, so this could very well be a pivotal year for TSLA’s stock price.
TSLA just took out the prior pivot high that I was talking about last Friday (click here). I have begun positioning for the next move lower by selling Dec 29th $355 calls. I have started small as is typically the case and will add to the position over the next couple of days. I received a credit of $0.90/share. I typically also day trade/follow a stock more closely while I am waiting for the pivot high and change in trend direction to get underway in earnest.
I will be tweeting/posting when I become more convinced that the new trend direction has begun. The stock may stay elevated until year-end, but I don’t think we are going to get above $350 before year-end.
I last updated TSLA on October 17th (click here) last week. The firing of the weekly price squeeze looks like it is starting and as I thought, it looks like the squeeze is going to fire to the downside. That would make it 4 in a row to the downside. I continue to hold bearish option positions in TSLA. Here are the charts … Continue reading →
There has been lots of what I would consider as being negative news on TSLA lately. That includes company-specific items along with news from competitors about their own EV product plans. I continue to trade TSLA intra-day most weeks as I await the appropriate time to start with my next longer-term short position. Today I started that short position via options (I sold bearish Nov monthly expiry call spreads). Here are how the charts look to me … Continue reading →