The market doesn’t look happy today, so maybe let’s look for a bearish occasion to trade, shall we?

One of the most popular stocks in the US is Tesla and this is the instrument of our interest today. Tesla is showing some signs of weakness and for the next few days or weeks, this can be our number 1 bear.

Why are we negative here? First of all, the price is below the long-term up trendline (blue). Buyers were trying to comeback above that resistance but failed miserably. In addition to the up trendline, the price could not break the 23,6% Fibonacci. In addition to this, three days ago, the price created a shooting star, which is a very powerful bearish candlestick formation.

Last but not least, Tesla is now coming back below the black line, which for weeks was limiting the bearish correction from the upside. It means that the escape from that bearish correction was a false one and now buyers have to pay the price for that mistake.

All that is very negative and points towards the 38,2% Fibonacci. That is currently the closest support and chances that the price will get there are pretty high.

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About Author

During his career, Tomasz has held over 400 webinars, live seminars, and lectures across the globe. He was also an academic lecturer at Poland's Kozminski University. In his previous work, Tomasz initiated live trading programs, where he traded on real accounts, showing his transactions, providing signals and special webinars for the accounts; none of which were ever negative. Tomasz gives preference to a technical approach to trading: mainly price action with very strict money management rules. He believes that the most important thing in trading is your mind, so it is much better to focus on trading psychology than to look for the Holy Grail of trading systems.

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