Stock of the day: Tesla

By Tomasz Wisniewski |

Published: July 01 2022, 08:35 GMT+0

Stock of the day: Tesla

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The first day of July brings us an analysis of Tesla – a favorite on the stock market. Most recently, we haven’t had any spectacular moves on this company but also Elon Musk has been kind of silent on Twitter. Worry not, technical analysis gives us hints that big movements are about to happen soon.

The big picture on Tesla is that for months, it’s been inside of a big symmetric triangle pattern (blue). Then, the price escaped to the downside, breaking the 770 USD support (yellow). After that breakout, surprisingly, we didn’t get a huge bearish momentum and a bigger slide. Instead of a sell-off, the price moved sideways, creating a pennant (green lines) and this pennant is the star of today’s analysis.

When you have a formation like this, the wise thing to do is to wait for the breakout. It should happen soon or later and usually brings us a proper trading signal. The breakout to the upside (along with the comeback above the 770 USD) would give us a signal to buy. On the other hand, the price closing a day below the lower green line would be negative and give us a signal to sell. As for now, it’s pretty pointless to try to predict the direction of the breakout. The best thing to do would be to simply wait and trade this setup accordingly.

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