A Return to the Status Quo

Sep 10, 2018

Thesis: A clear overreaction to Elon sparking up on the Joe Rogan podcast. Tesla has traded in a clear channel the past 18 months. The last time it traded below this channel it was also massively oversold and experienced a 20% correction back to its 200 DMA in a matter of days and displayed minor divergence. That instance looks very similar to now, even having a gap down just before the reversal.

A disciplined trader might wait for the 4 hour or 1 day chart to also display divergence between price action and the RSI but I will take a small position now as I worry sentiment may rebound quite fast without it.

Exit Point / Timeframe: I will look to the Fisher Transformation to take a similar shape as the last overreaction and exit once it has changed direction.

Disclaimer: I am not a financial adviser and this is not financial advice. Trade at your own risk.

Sep 10, 2018

Note

Sep 11, 2018

Note

Sep 11, 2018

Note

Our trade is predicated on the 18 month channel maintaining its structure. As such VPVR can help paint a clearer picture of what the channel actually looks like.

The high volume nodes (GREEN LINES) represent the channel in its most dense form, this is where the majority of trading has taken place and thus will have a lot of resistance before breaking outside of it.

The low volume nodes

We will use these as the extremities of the channel. Good for entry, but more risky as a price target.