Stock of the day: Tesla

By Tomasz Wisniewski|

Published: July 23 2024, 07:14 GMT+0

Stock of the day: Tesla

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Tesla’s chart currently exhibits a very clear and intriguing pattern. When last mentioned on July 2nd, I was bullish due to an inverse head and shoulders pattern that played out perfectly, pushing the price higher almost every day until July 11th. This consistent climb demonstrates strong buying interest and momentum in Tesla’s stock, highlighting the reliability of technical analysis in predicting market moves.

Since the mid-July peak, Tesla has formed a pennant pattern, marked with orange lines, indicative of a flat correction under the control of buyers. Pennants typically suggest a bullish continuation, reflecting a pause before the next upward move. This pattern signifies consolidation within a narrow range, often preceding a breakout in the direction of the prevailing trend. The pattern’s formation amid Tesla’s ongoing bullish trend is a testament to the underlying strength and resilience of the stock, suggesting that buyers are merely regrouping before the next leg up.

For trading, the strategy hinges on the pennant’s breakout direction. A breakout above the pennant signals a buy, suggesting the continuation of the bullish trend and potential new highs for Tesla. Conversely, a break below the lower line of the pennant would indicate a sell signal, although this scenario seems less likely given the current market dynamics. Overall, Tesla’s technical setup appears robust, with the pennant pattern poised to provide a clear directional cue for traders.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-tesla-15

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