DecisionPoint

Chart Spotlight on Tesla (TSLA) - Decisive Breakdown

I noticed on the StockCharts.com homepage "symbol cloud" that readers were downloading this chart more than Amazon and the SPX (based on size of the font). I decided to take a look. Wow! TSLA dropped more than 6.4% today! There are some real problems with this chart in the short term.



Today's decline broke a steep rising trend that had been intact since December. The breakdown is considered "decisive", meaning it was a more than 3% break down below the rising trendline. Decisive moves are typically initiations and not exhaustions. Note the gap that occurred with today's decline. I am inclined to believe we are looking at a breakaway gap which is considered an initiation to price moves in the same direction--down in this case. The Price Momentum Oscillator (PMO) is overbought and triggered a crossover SELL signal today. The On-Balance-Volume (OBV) tops are showing a bearish confirmation with price tops; both OBV and price tops are declining. The SCTR dropped out of the "hot zone" above 75 which also suggests lower prices.

The weekly PMO is rising on a BUY signal, but the price chart doesn't look bullish. Price nearly reached all-time highs before correcting this week. There will likely be move to test support. The strongest support lies at $180, but I think $240 could also provide support (3rd quarter 2016 high).


The NEW DecisionPoint LIVE public ChartList has launched! Click on the link and you'll find webinar charts annotated just before the program. Additional "chart spotlights" will be included at the top of the list. Be sure and bookmark it!


Come check out the DecisionPoint Report with Erin Heim on Wednesdays and Fridays at 7:00p EST, a fast-paced 30-minute review of the current markets mid-week and week-end. The archives and registration links are on the Homepage under “Webinars”.


Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin

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