Tesla (TSLA) seems to be the talk of the town. The leader, Elon Musk, always has an interesting perspective on what is going to be big for the company. Since they launched their Gigafactory initiative, Tesla has been in a topping pattern. We can see the sudden jump the stock took on the announcement of a gigafactory. Tesla pulled back and went on to make a higher high, but it was almost all gained and lost within a week. Since being at $291, Tesla has pulled back and closed at $216. Tesla is currently testing support after breaking below the previous low at $217 and has now bounced back up to $216. If Tesla has trouble maintaining a foothold here, next support would appear to be around $185.
If Tesla can hold support around this $217 level that would be bullish.
The last few candles have been associated with high volume as Tesla failed to stay above the 200 DMA. Today marked the first close higher than the previous day over the last 8 days. Where Tesla goes from here is very important. This is the first time Tesla has been below the 200 DMA for a while. Caution is advised.
Good trading,
Greg Schnell, CMT
