Stock of the day: Tesla

Today, we’re coming back to Tesla, which we last analyzed at the end of August. Back then, we were positive about this instrument despite the fact that Michael Burry aka “The Big Short” was shorting Tesla with great joy. In that piece we wrote:

“This breakout gives us a proper buy signal. The potential target is on the 777 USD, where we have a fresh crucial horizontal resistance (purple). Chances that we’ll get there are pretty high.”

Since that day, almost every single candlestick ended up closing higher. We broke the 777 USD resistance with relative ease while forming a channel up formation (black lines). When the price goes up in the channel up formation, it’s absolutely normal and desired for buyers. With Tesla, we even have something more! The price broke from the channel up to the upside. This is not very common and should be considered a sign of great power.

Where’s that coming from? Well, maybe because Michael Burry said he’s no longer shorting Tesla? Whatever the reason, from a fundamental point of view, we do have a positive sentiment here and of course a legitimate buy signal