Tesla Is On The Rise Following A ‘Key Reversal Day’
(Photo by Smith Collection/Gado).
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Tesla (TSLA) traded as low as $101.81 on January 6, then closed that day at $113.06. This was well above the January 5 high of $111.75. This defines a “key reversal day.” The stock has been below a death cross since May 27, 2022.
Tesla has an elevated p/e ratio at 38.07% and does not offer a dividend, according to Macrotrends.
The Daily Chart For Tesla
Daily Chart for Tesla
Courtesy of Refinitiv Xenith.
Tesla traded as high as $384.28 on April 5, 2022 and as low as $101.81 on January 6, 2023. This is a decline of 73.5%. The stock has been below its 200-day simple moving average since May 26, 2022. An attempt to breakout above this key moving average failed on September 29, 2022. The death cross shown on the chart was confirmed on May 27, 2022.
The lowest horizontal line at $150.60 is for January only. The line at $192.93 is the annual risky level for 2023. The line at $243.72 is the quarterly risky level, good until the end of March. The line at $334.23 is the semiannual risky level, in play until the end of June.
Note the key reversal day on January 6, 2023.
The Weekly Chart For Tesla
Weekly Chart for Tesla
Courtesy of Refinitiv Xenith.
The weekly chart for Tesla is negative but oversold with the stock below its five-week modified moving average at $149.25. It’s well below its 200-week simple moving average or ‘reversion to the mean’ at $165.84. The 12x3x3 weekly slow stochastic reading is ‘too cheap to ignore’ at 8.65. A reading below 20.00 is oversold, below 10.00 is “too cheap to ignore.”
Trading Strategy: Buy Tesla on weakness to its January 6 high of $114.39. Reduce holdings on strength to its annual risky level at $192.93.
