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 …
TSLA – Weekly Chart
The squeeze higher in the price beginning late in 2016 was quite the move … it pushed the trend strength histogram all the way into the “extreme” warning zone by mid-June 2017. The histogram has pulled all the way down into the “contraction” warning zone as price consolidated more-or-less sideways. Typically, I would look at that type of setup as pretty bullish, but all that I see on the fundamental side and financial side of TSLA tells me that we actually be nearing the actual absolute peak for TSLA. In my opinion, TSLA is a shaky house of cards, that will sooner or later, face the music of its business plan.
Note that the weekly chart is in the position of resistance here … $382.40 is the level that would need to be broken for the “trend” of the weekly chart to get back in a bullish position.
TSLA – Daily Chart
The daily chart should be viewed with the bigger weekly chart in mind … all that has been happening lately is the consolidation of the bigger weekly trend, and as mentioned, it looks like we are near the end of that move. The daily ATR is in the position of resistance here, and therefore, if the weekly consolidation pattern is going to be broken to the upside, then the daily ATR at $371.22 needs to be taken out first. I have an audio alert set for ATR violation on the daily chart.
TSLA – 195 Minute Chart
I highlight the bigger consolidation pattern for TSLA here on the 195 min chart … it sure looks like price has been making an upward sloping triangle here. Coming after the big push off of the late-2016 lows, normally I would consider that as a bullish consolidation pattern. As mentioned, I think that the fundamental news is finally going to come home to roost here in late 2017. Imagine the rush to the exits before the December 31st deadline that would show TSLA in your portfolio for institutional accounts if the story does start to unravel! It could be a quick and violent fall to death for TSLA and its institutional bulls.
I started building my short in TSLA today by selling Nov monthly 410/425 calls for about a $1.025 credit (15 contracts). I plan to add to that position on up days for the next week as we head into quarterly earnings (estimated to be after the close on October 25th).
Cheers … Leaf_West
P.s. Since TSLA began its real honeymoon phase with Wall Street in 2013, there have been 5 weekly price momentum squeezes before the one that has just started recently (we are in the 5th week currently) … the first 2 squeezes last 2 weeks and 3 weeks respectively and led to moves higher in the stock price. The last 3 were 6, 4, and 3 weeks in duration and led to price moves lower. The current weekly squeeze in price momentum is in its 5th week.