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TSLA Technical Analysis
- Thread starter Robert.Boston
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- elon is an ass TSLA
In summary, TSLA has had not much trading recently, and it will soon have more, and will break out of the triangle in one direction or the other. In other news, the sun will probably rise tomorrow, and the sky will either be blue, or cloudy, or somewhere in between.
And the breakout will be based on some sort of fundamental, giving the impression that it was driven by technicals when it really wasn’t.
I think this post is a play on "420". Thanks to the split, 420 has gotten more play than Gilligan's Island reruns.
But yeah, the wedge/pennant pattern is one of lower highs and higher lows coming to a point that must break one way or another.
Man such haters. I found technical overviews of the overall market and Tsla to be extremely useful. It has accurately predicted the trend utilizing bull or bear signals at close. I know some people just want to know what SP is going to be the next hour, but to me that's kind of random and not very useful.
For instance, when Tsla was having a bad day last Friday due to Trump's Covid, people had no idea where the "bottom" was, predicting price actions down to the low 300s. Looking at the technical analysis since Monday pointed to a bullish trend vs a bearish trend with a strong support at 410-413. And if that support were to break, going down to the 380s as the next support and bouncing back before close will still show a bullish trend. Knowing that I was not worried and as predicted Tsla bounced back from the first trench of support before close which means bullish action for the week after. As predicted, this week was pretty bullish.
For instance, when Tsla was having a bad day last Friday due to Trump's Covid, people had no idea where the "bottom" was, predicting price actions down to the low 300s. Looking at the technical analysis since Monday pointed to a bullish trend vs a bearish trend with a strong support at 410-413. And if that support were to break, going down to the 380s as the next support and bouncing back before close will still show a bullish trend. Knowing that I was not worried and as predicted Tsla bounced back from the first trench of support before close which means bullish action for the week after. As predicted, this week was pretty bullish.
I do find it funny that people come to the Technical Analysis thread go poke fun at technical analysis. To each their own.
I'm not on board with this:
"Nine times out of 10, the breakout will occur in the direction of the existing trend. But, if you are looking for an entry point following a symmetrical triangle, jump into the fray at the breakout point."
If it breaks to the upside 9 out of 10 times, why wait for the breakout? You're just leaving money on the table.
Was there more than one person who expressed skepticism?
I think the best way to explain technicals to someone who's doubtful is to explain that technicals are a window into market psychology. Overhead resistance is an easy example. If an equity has significantly dropped in price, everyone who has bought at the higher prices is pissed off and looking for strength to sell into, and this prevents a new upward trend from getting established. It takes a change in the situation, like a good earnings report, to change that and have a breakout.
Technicals also give a vision of what people in the know might actually know. The debacle with Piedmont Lithium is a good example. Prior to the news about the Tesla deal, Piedmont's share price started shooting up. This was a tipoff that something was brewing. In this case, it got out of control and the exchanges had to step in but, in most cases, there's a little bit of movement prior to news. I think this is more important to understand on the downside. If the share price of your favorite holding is mysteriously dropping, SALE while you can.
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They didn’t come to this thread to make fun of TA, they did so in the main thread. Because it is off topic in the main thread the whole discussion got moved over here.
The two quotes at bottom of this post don't appear to have been moved here from the Main Thread. They were responses to my answering someone's question as to what pattern appeared to be forming on the TSLA tech chart (i.e., a triangle or pennant).
These would appear to be people deliberately posting in the TA thread, mocking TA.
Not that it's actually a bother, just find it funny that people take the time to do that.
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If the trend appears to be an upward triangle, and is supported by other indicators or potential catalysts that would reinforce that direction, then I would agree. Waiting would equate to leaving money on the table.
The point being made is that in a symmetrical triangle (i.e., one without an upward or downward trend), that there is no predicted direction of a break-out, just that a break-out is likely imminent. So, a technical trader would generally wait for a confirmation of direction of the trend before taking a position.
Just to clarify, my question was not posted out of any desire to make fun of or mock TA - it was out of curiosity for the graph posted by @MABMAB - now I am not sure he was poking fun by pointing to the triangle converging at 420.
I dont understand much about TA - but I do follow this thread to try and understand some of it. @Papafox explanations about Boehringer bands and EMAs providing resistance levels has been helpful in the past - hence my interest. @Featsbeyond50 explained that it is a window into market psychology - I can believe that
Sorry for lack of clarity! I didn't interpret your question as mocking at all. Please keep asking them! My initial response linking to investopedia (that drew the mockery) was to your question after all.
That's the whole point of a forum like this. To help each other better understand and leverage each other's experience and knowledge base.
The subsequent posts about meteorology and fundamentals vs. TA were the mockery.
I was referring to earlier posts (which were definitely moved).
I agree with you that mocking TA should not take place in this thread. Anyone who thinks TA is baloney can simply ignore the thread.
To boldly mix threads, if you're sure of a breakout in one direction or another, there's an option strategy (sort of the opposite of an iron condor, but I can't remember what it's called) that loses money if the stock stays flat but makes money proportional to the magnitude of any breakout in either direction. I can't find it though...
Short Condor Spread with Calls - Fidelity
Max profit if underlying asset is above or below your spread at expiration.
Also Short Butterfly Spread with Calls - Fidelity
Same idea, but higher risk reward profile
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Not really. Not a significant amount anyway. By the time the triangle is formed you're not missing out on too much. Trendlines really like 3 points to confirm; if you're acting on a triangle before then you're acting early.
One thing you can do with a symmetrical in an uptrend is to enter on confirmation of the lower trendline. That is, the third (or even fourth) time price hits that lower trend line and reverses, especially if that reversal breaks a trend line embedded in the triangle. Like, entering on 9/24 or even waiting for the TLB on 9/25 (like I did) gets you a few extra bucks hedging the breakout to the upside.
FWIW, a straddle or strangle is a better play in consolidating price action, because IV is almost always on its way down with the consolidation. Better to not bound profit with spreads (which is what a short condor/iron condor does) and at the same time realize benefit on both sides of your position--while the put side of a position will of course go down in value as underlying goes up, the likely increase in IV will temper your losses.
Apparently my post came off more harsh than intended. My intent was not meant to mock TA (I frequent this thread after all), but rather point out how moves in the stock can sometimes be attributed to technicals when they really shouldn’t be.
Craig Johnson is a managing director and technical strategist at Piper Sandler (formerly Piper Jaffray). He was a regular guest of mine on my old TV show, and still sends me his newsletters. In early 2003 he recommended TSLA, which led to my first purchase at $38 ($7.60 post-split).
Craig’s colleague Alexander Potter has a BUY rating on TSLA with a price target of $515.
Below is what Craig wrote this morning:
TSLA—Recent pullback has confirmed support off an emerging uptrend/support near $330; back above the 10-week WMA; RS remains in positive territory and notable TechniGrade ranking; add to positions, a retest of the ‘20 highs near $500 appears likely.
Craig’s colleague Alexander Potter has a BUY rating on TSLA with a price target of $515.
Below is what Craig wrote this morning:
TSLA—Recent pullback has confirmed support off an emerging uptrend/support near $330; back above the 10-week WMA; RS remains in positive territory and notable TechniGrade ranking; add to positions, a retest of the ‘20 highs near $500 appears likely.
Well, I dunno where anyone elses triangles are drawn, but my daily says a close above 442 today signals a breakout. Looks like someone doesn't want that to happen... Gonna be close.
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