TSLA : A Brief Respite or the Start of a Comeback (Wednesday 12)Overview:
At the time of writing, the stock is hovering around $215, barely holding on to that level. The next significant support aligns with the lower boundary of my descending channel, around $210. If that level fails, I believe we could see further downside—potentially even a move below $200 if selling pressure intensifies.
Technical Observations:
1. **Descending Channel**
My chart shows TSLA trading within a **downward-sloping channel**. The stock is currently near the lower portion of that channel, suggesting that if it loses support at $210, it may continue sliding along the lower band.
2. **Key Support & Resistance Levels**
- $210: This level is both a psychological round number and the lower bound of the channel. If it doesn’t hold, further downside is likely.
- $232: This is a notable resistance level near the channel’s upper boundary. Breaking above $232 (especially on strong volume) could be a signal of a short-term reversal or a relief rally.
3. **Indicators (RSI & TRAMA)**
- **RSI**: Currently in oversold territory, which sometimes indicates a potential bounce. However, oversold can remain oversold if momentum is strong.
- **TRAMA** (my chosen trend/momentum indicator): Still suggests a strong downward trend. Any bounce could be short-lived unless broader conditions change.
4. **Potential Bearish Continuation vs. Bullish Breakout**
- **Bearish Continuation**: If TSLA cannot hold $210 and continues to close below that channel line, I believe a drop below $200 becomes increasingly likely.
- **Bullish Breakout**: In the unlikely event of a swift rebound above $232, it would signal a break of the channel’s upper boundary and potentially open the door to a short-term rally.
My Personal Trading Perspective:
The slight bounce might just be a short-term relief rally, where buyers step in to pick up shares at a perceived discount. However, if there’s no follow-through and volume remains lackluster, the rally can fizzle out quickly, leaving room for further declines.
- Long-Term Entry:
I’d personally look for a strong breakout and daily close above $232 (and above the upper 2nd deviation line) before adding to any long-term positions. That would give me more confidence that the downward trend is reversing.
- Short-Term Long:
I’m watching for a retest of $210. If it holds and shows signs of a bounce, I might take a short-term long position with a potential profit target around $220. I would keep a tight stop-loss, though, because if $210 fails, it could drop quickly.
My report is similar to yesterday. My thought process has not changed.
Disclaimer: This is my personal trading perspective and not formal investment advice. Always do your own research, double check my findings, and manage your risk accordingly.
