Bullish Before EarningsKey points
- Started parabolic run Feb 2016.
- Found heavy support at the 61.8 fib extension
- Down -20% this year, putting it in bear territory.
Last report, Tesla beat estimates virtually across the board. Elon predicts profitability Q4. Options are implying a 8-10% move up or down which is huge, larger than the usual 5% shift. Notice how the 78.6 extension has served as heavy resistance and we've failed to break $325 three times.
Decreasing volume and MACD crossover could give bulls momentum for a breakout with a $315 target. I would expect a correction soon after however, and generally sideways action until Q4 when the most important earnings report is released, going into 2019. I don't see it going higher than $315 short-term since weekly chart is bearish. Also, multiple failed retests and lower highs this month. Trade war prospects significantly impact Tesla's bottom line, and investors are showing caution based on technicals.
Bottom line
Cautiously Bullish (short-term)
Entry: $300
Exit: Sell 25% at $307, 33% at $310 and let rest (58% long) ride until signs of bearish reversal.
Stop loss: $296
