A Simple Set Up to Trade TSLA
When trading is simplified, it can lead to profits that might surprise you.
The Tesla bulls will always have plenty to be excited about when it comes to the long term prospects for the company.
That does not always translate well over shorter time periods, and we are certainly in one of those bearish stretches for TSLA right now.
I do see opportunity for upside and the set up is excellent.
When shares are trending they will have pivotal moments where the trend is tested, which could signal a reversal or confirm that we continue.
That type of set up makes for great trading opportunities because the decision making becomes very straightforward.
Here is a look at the daily candles for TSLA.
Prior support at 182.63 turned into resistance and shares rejected lower against the large volume shelf at this price level.
Now TSLA looks like it wants to make another attempt to get above this level, forming a higher high and getting out of the downtrend.
You will also notice the clear trendline that would also be broken if this level was recovered in the near term.
Add in the 20-day simple moving average (SMA) sliding in above at the same spot, and it will take a lot for TSLA to get moving higher.
If shares do break above 182.63 and follow through, there will be plenty of reason to think they could continue to move up.
The downtrend will have broken, the 20-day SMA will now be support, and shares will be trading in the middle of a large volume shelf just above 182.63, rather than below it.
On the other hand, if shares reject again at this level, it is an easy decision to take a short position and expect the downtrend to continue.
If you are interested in how I plan to trade it, consider upgrading your subscription! You will get every detail including the options I’m considering, profit targets, and stop loss levels.
As the week progresses I will drop two more trade ideas. I would like to see how the week starts first.
But for TSLA, let’s get right to it!
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