Is Tesla on the Brink of a Breakout?
Tesla: Coiled Tightly as Breakout Looms
Tesla's stock is resembling a tightly wound Tesla coil, reflecting the market's struggle to resolve its current equilibrium.
In recent months, Tesla’s share price has been contained beneath a descending trendline which has mapped the lower swing highs from the July peak (see daily candle chart below).
However, despite multiple reasons to sell-off in recent weeks, including a weakened outlook for the EV market and a damming short note from research house Bernstein, the stock has remained resilient. Since early-November Tesla has carved a bullish series of higher swing lows – taking the shares back above their 200 day moving average (MA).
Presently, the stock is caught within a 'wedge' pattern, squeezed between a short-term ascending trendline from November lows and a long-term descending trendline from July highs. As this pattern approaches its apex, Tesla has begun consolidating sideways within a tight box formation, indicating an imminent breakout.
Tesla (TSLA) Daily Chart
Past performance is not a reliable indicator of future results
Lower Timeframe Analysis
Zooming into the hourly candle chart highlights the intensity of the recent consolidation box…
This timeframe can also be useful for swing traders looking to time breakout trades. A decisive break and hold above the consolidation box on the hourly timeframe could potentially trigger a larger wave of buying pressure. Conversely, a break and hold below the consolidation box could see the November swing lows swiftly retested.
Tesla (TSLA) 1-Hour Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Tesla's stock is resembling a tightly wound Tesla coil, reflecting the market's struggle to resolve its current equilibrium.
In recent months, Tesla’s share price has been contained beneath a descending trendline which has mapped the lower swing highs from the July peak (see daily candle chart below).
However, despite multiple reasons to sell-off in recent weeks, including a weakened outlook for the EV market and a damming short note from research house Bernstein, the stock has remained resilient. Since early-November Tesla has carved a bullish series of higher swing lows – taking the shares back above their 200 day moving average (MA).
Presently, the stock is caught within a 'wedge' pattern, squeezed between a short-term ascending trendline from November lows and a long-term descending trendline from July highs. As this pattern approaches its apex, Tesla has begun consolidating sideways within a tight box formation, indicating an imminent breakout.
Tesla (TSLA) Daily Chart
Past performance is not a reliable indicator of future results
Lower Timeframe Analysis
Zooming into the hourly candle chart highlights the intensity of the recent consolidation box…
This timeframe can also be useful for swing traders looking to time breakout trades. A decisive break and hold above the consolidation box on the hourly timeframe could potentially trigger a larger wave of buying pressure. Conversely, a break and hold below the consolidation box could see the November swing lows swiftly retested.
Tesla (TSLA) 1-Hour Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.