It's good to create buy opportunity after "W" bottom confirmed from TA in 200-210 area.
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TSLA Technical Analysis
- Thread starter Robert.Boston
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ev-enthusiast
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ev-enthusiast
Active Member
I'm calling to buy dip is purely from TA perspective. But Q4 delivery and model X is still uncertainty in next month or so. So I'll only buy shares, in case of big fall due to miss Q4 delivery or model X further delay, I might buy DITM calls.
ev-enthusiast
Active Member
jesselivenomore
Member
We've gotten the pullback on cue, maybe we get to 220, maybe this is it, but that's not important. What's important now is a break of the prior high, 238.6, on big volume. I would say at least 5-6 mil shares. If that occurs then the down trend is broken and a new uptrend back up to all time highs will be established. And that would be significant because I doubt the 280 highs hold for the 3rd time up, I think we break it. But first things first, I believe we will need a news catalyst to break 238.6 on the volume that is necessary. If we break it on low volume it is likely to fail. The news may be first deliveries of the X, but the market may shrug that off especially if the numbers are low. My guess is that we consolidate here until Q4 delivery numbers are released. That should provide the catalyst and volume to break higher.
ev-enthusiast
Active Member
ev-enthusiast
Active Member
Honestly, seems to be difficult times right now.
There could be some kind of double bottom formed some days ago.
There could be an ascending channel in the works right now.
I think as soon as we are back above the 200DMA and that $236 area again, things should look a bit more positive.
TSLA is currently trading on very low volume.
Any news (pos and neg) could induce wild swings, high short interest helping even more.
jesselivenomore
Member
It has played out exactly as expected so far. Although I keep saying in the short term thread that most of these moves are noise, and thats true from the big picture, however, its current trading is very clear cut and predictable.
Pulled back from 200 EMA and top of the bollinger bands as expected. The EMA works better for TSLA than the SMA. Look back throughout its history, when it is trading below the 200 EMA, it needs to break it with force and above average volume to confirm a new uptrend. All the times it lacks those 2 elements, share price fails immediately in 1-2 days. Also, throughout TSLA's trading history, whenever it is in a downtrend, the bollinger bands always act as resistance. Only when it pushes into the bands and stays there for a few days, again on high volume, is a new uptrend established. So at 240 both those resistances came into play, which made this pullback very predictable as noted by my prior post.
Now with this pullback there are 2 options going forward. If you are feeling adventurous, you could buy a dip here. We've hit 220 support, also as stated before as a target. Doing so will give you a better average, if you are very bullish and wanted to buy anyways.
Or, the safer play, which is very simply to wait until we break back above 240 with force and big volume. That means a 5%+ up day on at the very least 5 mil shares traded. If this occurs, a new uptrend is established and you can look for 280 as an initial target, but I doubt we stop there this time up.
Personally, my approach is option c, since I've been holding a long position pre q3 earnings, I exited half at the 240 resistance. Once we trade back above that level, I will put the half back on. So if we fail and head lower, I only take half the losses, and if we head higher I don't lose any gains. I am holding half in case there is a positive news event so I still have some exposure if we have a big gap up(likely what is needed to break 240 anyways).
Pulled back from 200 EMA and top of the bollinger bands as expected. The EMA works better for TSLA than the SMA. Look back throughout its history, when it is trading below the 200 EMA, it needs to break it with force and above average volume to confirm a new uptrend. All the times it lacks those 2 elements, share price fails immediately in 1-2 days. Also, throughout TSLA's trading history, whenever it is in a downtrend, the bollinger bands always act as resistance. Only when it pushes into the bands and stays there for a few days, again on high volume, is a new uptrend established. So at 240 both those resistances came into play, which made this pullback very predictable as noted by my prior post.
Now with this pullback there are 2 options going forward. If you are feeling adventurous, you could buy a dip here. We've hit 220 support, also as stated before as a target. Doing so will give you a better average, if you are very bullish and wanted to buy anyways.
Or, the safer play, which is very simply to wait until we break back above 240 with force and big volume. That means a 5%+ up day on at the very least 5 mil shares traded. If this occurs, a new uptrend is established and you can look for 280 as an initial target, but I doubt we stop there this time up.
Personally, my approach is option c, since I've been holding a long position pre q3 earnings, I exited half at the 240 resistance. Once we trade back above that level, I will put the half back on. So if we fail and head lower, I only take half the losses, and if we head higher I don't lose any gains. I am holding half in case there is a positive news event so I still have some exposure if we have a big gap up(likely what is needed to break 240 anyways).
Excellent analysis. Thanks. I am holding a significant cash position as well. The macro that I would add to your analysis would be the Fed interest rate hike. It should be priced into the market but I am betting it causes a flash drop and may provide an excellent entry point as well.
jesselivenomore
Member
There are two views of current macro environment and Fed hike:
1. The economy is still very weak under the surface while equity and real estate prices are propped up by QE and low interest rates. This is evidenced by weak manufacturing data and historically low labor force participation rates. Thus, a rate hike would be very damaging, taking the patient off the drug when that was the only thing keeping him alive. Markets would reacted negatively to a rate hike in this case.
2. The economy is improving and can be self sufficient even with higher rates. If this is true, then we must normalize interest rates at some point because a prolonged era of low interest rates creates imbalances in the economy that will have adverse long term effects. Thus, an increase in rates will signal "lift off", or normalization to a healthy economy. Markets would react positively to a rate hike in this case.
How the market reacts in the short term is up to which of these scenarios the market believes in. So while a flash drop is certainly a possibility, don't discount a flash pop either.
Succinctly put. However, some old-school traders I follow have been chattering and posited that there is a third possibility, and one that could potentially cause the most "pain" to options traders: the market does absolutely nothing in response. We shall see what we shall see.
So, as with all things 'investing'; we could have a 'flash pop', 'flash drop', or 'flash flat' . Man, I love trying to read the tea leaves
You left something out. It can be a slow rise or slow fall. Or, a flash pop, followed by a slow drop, aka the "unicorn".
Thanks for the contributions from all of you! Bye my GTC orders I will hopefully catch both the flash drop with my buy orders for Jan 18 calls, and the flash pop with sales orders for my Jan 17 calls
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ev-enthusiast
Active Member
I took a look back in the time machine and found that pretty short squeeze during 2013.
Does anybody use bollinger bands and keltner channels to determine a squeeze?
What might be possible good parameters for the indicators given the current context for TSLA?
Is there anybody with experience using this indicator?
Does anybody use bollinger bands and keltner channels to determine a squeeze?
What might be possible good parameters for the indicators given the current context for TSLA?
Is there anybody with experience using this indicator?
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ev-enthusiast
Active Member
Average daily trading volume keeps on dropping, this will make it even more difficult for the shorts to cover.
jesselivenomore
Member
Today's price action fulfilled my 2 criteria for a trend change to the next leg up, highlighted in the posts above.
A break back above the 200 EMA while 1. trading 5+ mil shares in volume 2. 5%+ in price appreciation
Today's volume of 5.08 mil checks box 1 and indeed is the highest volume traded in 2 months if you take out two outside news events.(10/20 CR reliability report, 11/4 earnings)
Today's price move of 6+% was also the biggest none news event move we've had in quite some time, closing on the very highs.
To reiterate, throughout TSLA's trading history, whenever it is in a down trend and trading below its 200 EMA, a day fulfilling those two criteria while breaking back above the 200EMA has signaled a trend reversal every single time. Now, that doesn't mean it will happen this time 100%. In fact, tomorrow is a crucial day to see if price can hold up, or follow through to the upside. If it significantly falters, a failure is still possible. Like technicals in all cases, just because something has worked in the past does not guarantee future success. It only increases your odds.
As mentioned in posts above, if you bought the first target of 220, you are in great shape, however that was an aggressive strategy. Personally, I adopted the safer approach of waiting for confirmation before re-entering the 50% I exited the first time up to 230s. That confirmation was today.
Once again, how we hold up the next 1-3 days is critical. But, so far so good.
A break back above the 200 EMA while 1. trading 5+ mil shares in volume 2. 5%+ in price appreciation
Today's volume of 5.08 mil checks box 1 and indeed is the highest volume traded in 2 months if you take out two outside news events.(10/20 CR reliability report, 11/4 earnings)
Today's price move of 6+% was also the biggest none news event move we've had in quite some time, closing on the very highs.
To reiterate, throughout TSLA's trading history, whenever it is in a down trend and trading below its 200 EMA, a day fulfilling those two criteria while breaking back above the 200EMA has signaled a trend reversal every single time. Now, that doesn't mean it will happen this time 100%. In fact, tomorrow is a crucial day to see if price can hold up, or follow through to the upside. If it significantly falters, a failure is still possible. Like technicals in all cases, just because something has worked in the past does not guarantee future success. It only increases your odds.
As mentioned in posts above, if you bought the first target of 220, you are in great shape, however that was an aggressive strategy. Personally, I adopted the safer approach of waiting for confirmation before re-entering the 50% I exited the first time up to 230s. That confirmation was today.
Once again, how we hold up the next 1-3 days is critical. But, so far so good.
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