Stock of the day: Tesla

By Tomasz Wisniewski|

Published: July 12 2022, 09:02 GMT+0

Stock of the day: Tesla

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The week hasn’t started off well for Tesla. During the Monday session, the price declined sharply. That drop was technically relevant, relevant enough for a proper, mid-term sell signal.

Let’s start off with the big picture. For months, Tesla was inside of a big symmetric triangle pattern (blue lines). In May, the price broke to the downside and created a much smaller triangle or if you will, a pennant (green lines). On Friday, the price managed to escape from the pennant to the upside but the rise stopped almost immediately – on the 760 USD resistance (red).

That decisive bounce from this key level is the first reason to go short here. The second one is that the breakout to the upside from the triangle was a false one (yellow) and can be considered a strong signal in the opposite direction (down).

As long as the price stays below the 760 USD, Tesla has bigger chances of going down than up and our sentiment remains bearish.

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