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Tesla Continues To Break Down From This Bearish Pattern, Here’s Why A Bounce Is On The Horizon – Tesla (NASDAQ:TSLA)

ByMelanie Schaffer

Dec 19, 2022
Tesla Continues To Break Down From This Bearish Pattern, Here's Why A Bounce Is On The Horizon - Tesla (NASDAQ:TSLA)

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Tesla, Inc TSLA was sliding about 2.5% on Monday, in a continued breakdown from a bear flag pattern, which Benzinga called out on Dec. 9.

The electric vehicle (EV) giant may soon receive renewed attention from its CEO Elon Musk, who on Sunday polled millions of his followers on Twitter to ask if he should “step down” as the CEO of the social media company, which he acquired in October.

Musk has sold billions worth of Tesla stock to fund his purchase of Twitter, adding downwards pressure to the former. Traders and investors have also worried Musk’s preoccupation with Twitter could be bad for Tesla, with his attention divided between Tesla and the additional company.

See Also: Elon Musk’s Twitter To Seek Investors At $44B Valuation

Like many tech stocks, Tesla performed poorly this year, plunging about 60% from the Jan. 3 opening price of $382.58 to trade near the $146 level. Growth stocks have been negatively impacted by soaring inflation and steeply rising interest rates, which caused consumers to tighten their spending.

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The Tesla Chart: When Tesla broke down from its bear flag on Dec. 12, the measured move was about 14%, which suggested Tesla could call to $154. Tesla completed the measured move on Dec. 15, where the stock rebounded briefly before declining further in a downtrend.

  • Tesla’s most recent lower high within the downtrend was formed on Friday at $160.99 and the most recent confirmed lower low was printed at the $150.04 level on that same day. On Monday, Tesla was falling further but the stock hasn’t suggested that the next lower low has occurred.
  • If Tesla closes Monday’s trading session near the low-of-day, the stock will print a bearish Marubozu candlestick, which could indicate lower prices will come again on Tuesday. If the stock bounces up later on Monday to form a lower wick, Tesla will print a hammer candlestick, which could indicate the next low is in and a bounce is on the horizon.
  • A bounce is likely to come over the next few days because Tesla’s relative strength index (RSI) is measuring in at about 26%. When a stock’s RSI reaches or falls below the 30% level, it becomes oversold, which can be a buy signal for technical traders.
  • Tesla has resistance above at $152.19 and $166.71 and support below at $139.53 and $134.70.

Read Next: As Tesla Analyst Laments $600B Market Erosion, Elon Musk Schools Him On Basics Of ‘Securities Analysis’ 

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Image and article originally from www.benzinga.com. Read the original article here.