Is Tesla Breaking Support?
Tesla continues to bleed lower following its big fourth-quarter breakout. Now it may be crumbling through support.
As we noted at the time, $900 was an important level on December 21. It had been a high from early 2021, and TSLA bounced sharply after turning the old resistance into new support.
But what followed that rally? Prices shot back toward the November 23 high around $1,200. That resulted in something of a bearish double-top reversal pattern. The fact it occurred slightly below the all-time high on November 4 is also noteworthy.
Next, TSLA failed to hold its rally on strong quarterly results. While the supply-chain issues were a drag, high valuations are another potential headwind. Given the hawkish Federal Reserve and rotation away from high-multiple growth stocks, investors may simply be less willing to stomach the high valuation on Elon Musk’s company.
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As we noted at the time, $900 was an important level on December 21. It had been a high from early 2021, and TSLA bounced sharply after turning the old resistance into new support.
But what followed that rally? Prices shot back toward the November 23 high around $1,200. That resulted in something of a bearish double-top reversal pattern. The fact it occurred slightly below the all-time high on November 4 is also noteworthy.
Next, TSLA failed to hold its rally on strong quarterly results. While the supply-chain issues were a drag, high valuations are another potential headwind. Given the hawkish Federal Reserve and rotation away from high-multiple growth stocks, investors may simply be less willing to stomach the high valuation on Elon Musk’s company.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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