TSLA: Last CHANCE to REACT! - D&W charts
TSLA shares are trying to react today, and this is something that could signal a recovery, which is understandable, given how much the price has fallen in recent weeks and how oversold the stock is at the moment.
Since the last top in December, the stock has plummeted almost 30%, breaking all its medium-term supports, materializing a downtrend. I say the price is oversold because the RSI is at an extremely low level, and the last time we saw an RSI below 20, in December 2022, the stock actually recovered after confirming a bottom in the price.
TSLA’s RSI analysis and comparison to December 2022:
However, the trend is still downwards, and although there is the possibility of a recovery, it won't be easy to reverse the trend. Remember that pullbacks are different from reversals.
For the price to reverse the downtrend, we would need to see HH/Hls again, as well as a break of the 21 EMA, which is clearly pointing downwards.
What's more, TSLA's price is on the verge of triggering a Death Cross when the 50MA crosses the 200MA downwards, one of the most famous bear market signals.
A continuation of the downtrend can be avoided if there is a strong and clear reaction as soon as possible, and now would be a good time, as the price has approached a support region on the weekly chart:
We are close to the support line of a bearish channel. Last week's candle could be a possible Exhaustion Bar, but the price needs to react and reject the last bearish candle by breaking through its high at $217.80. Only then will we see a good reaction that could halt the long-term downtrend, or even reverse it. For now, until such a scenario materializes, any recovery could be just another Dead Cat Bounce.
Remember that I’ll keep you updated on this, so consider supporting this idea if you liked it, and follow me for more analyses like this.
All the best,
Nathan.
Since the last top in December, the stock has plummeted almost 30%, breaking all its medium-term supports, materializing a downtrend. I say the price is oversold because the RSI is at an extremely low level, and the last time we saw an RSI below 20, in December 2022, the stock actually recovered after confirming a bottom in the price.
TSLA’s RSI analysis and comparison to December 2022:
However, the trend is still downwards, and although there is the possibility of a recovery, it won't be easy to reverse the trend. Remember that pullbacks are different from reversals.
For the price to reverse the downtrend, we would need to see HH/Hls again, as well as a break of the 21 EMA, which is clearly pointing downwards.
What's more, TSLA's price is on the verge of triggering a Death Cross when the 50MA crosses the 200MA downwards, one of the most famous bear market signals.
A continuation of the downtrend can be avoided if there is a strong and clear reaction as soon as possible, and now would be a good time, as the price has approached a support region on the weekly chart:
We are close to the support line of a bearish channel. Last week's candle could be a possible Exhaustion Bar, but the price needs to react and reject the last bearish candle by breaking through its high at $217.80. Only then will we see a good reaction that could halt the long-term downtrend, or even reverse it. For now, until such a scenario materializes, any recovery could be just another Dead Cat Bounce.
Remember that I’ll keep you updated on this, so consider supporting this idea if you liked it, and follow me for more analyses like this.
All the best,
Nathan.
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