TSLA: It Has Just Reached a Major Turning Point (D and W charts)
Updated
TSLA shares are down today, showing a bearish reaction right after closing their gap at $242.08, which is acting as a resistance level, as expected.
The medium-term trend is up, as TSLA is recording higher highs/lows since bottoming out on October 31 at $194. In addition, it recently triggered an Inverse Head and Shoulders chart pattern after breaking through the $226 area, the neckline of this pattern, which is another bullish reversal chart structure. An IH&S pattern is nothing more or less than a bearish pivot point followed by a bullish pivot point (a lower H/L followed by a higher H/L).
Now, if TSLA really corrects, it could look for its next support levels, such as the $226 mentioned above, which is close to the 21 ema on the daily chart and close to a previous gap as well ($225.40). Despite today's bearish reaction, this top signal has not yet been technically triggered.
Could TSLA reverse and thwart this bullish sentiment? Yes, but it would need to trigger a clear bearish reversal structure (there isn't one so far) or lose the $206 again, because that key point was a previous bottom, and TSLA would make a new lower low if it lost it.
On the weekly chart, we see that TSLA is reacting around a clear support area (yellow line), but is still within a Descending Channel, as evidenced by the purple lines. Therefore, for the long term to resume its bullish sentiment, it must break out of this channel to the upside.
In any case, despite the bearish reaction and a possible pullback, medium-term sentiment is bullish and, in theory, TSLA can still seek higher levels. We'll be monitoring its key points closely. I'll keep you updated on this, so remember to follow me for more analysis like this.
The medium-term trend is up, as TSLA is recording higher highs/lows since bottoming out on October 31 at $194. In addition, it recently triggered an Inverse Head and Shoulders chart pattern after breaking through the $226 area, the neckline of this pattern, which is another bullish reversal chart structure. An IH&S pattern is nothing more or less than a bearish pivot point followed by a bullish pivot point (a lower H/L followed by a higher H/L).
Now, if TSLA really corrects, it could look for its next support levels, such as the $226 mentioned above, which is close to the 21 ema on the daily chart and close to a previous gap as well ($225.40). Despite today's bearish reaction, this top signal has not yet been technically triggered.
Could TSLA reverse and thwart this bullish sentiment? Yes, but it would need to trigger a clear bearish reversal structure (there isn't one so far) or lose the $206 again, because that key point was a previous bottom, and TSLA would make a new lower low if it lost it.
On the weekly chart, we see that TSLA is reacting around a clear support area (yellow line), but is still within a Descending Channel, as evidenced by the purple lines. Therefore, for the long term to resume its bullish sentiment, it must break out of this channel to the upside.
In any case, despite the bearish reaction and a possible pullback, medium-term sentiment is bullish and, in theory, TSLA can still seek higher levels. We'll be monitoring its key points closely. I'll keep you updated on this, so remember to follow me for more analysis like this.
Trade closed: target reached
TSLA reached our support at $226 with impressive precision, and now we see an interesting reaction.
TSLA shares are recovering nicely, just after hitting their support area, which maintains the medium-term bullish bias.
We see no bearish reaction today, and no bearish structure suggesting a reversal.
For now, no surprising reaction, and everything is going according to plan.
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