TSLA: Dead Cat Bounce?

10 сент. 2020 г.

Hello traders and investors! Would this be a Dead Cat Bounce? Or will Tesla fly again? There are some key points to keep in mind.

First, if we look at the hourly chart, Tesla is just doing a pullback to the 21 ema, which is normal and expected. The problem is that the pullback is too intense, and this spoils the bullish momentum.

Since the stock gapped up today, it could’ve left us with an Island Reversal chart pattern, but since today’s gap was quickly closed, this indicates that the bulls lack the strength they need to continue the trend.

On the bright side, Tesla is in a support zone, made of the 21 ema, the gap and the blue line at $ 372.

Now let’s see the daily chart:



Tesla filled the gap (yellow area) as we thought, and it is going up today. Despite of this, today’s candlestick is quite bearish, and Tesla is still trading under the 21 ema, so, the trend is still bearish.

If Tesla trades under today’s candle low, of if it loses the purple line at $ 359, it will enter in a clear bear territory, and it will just seek for further supports. The gap around $ 284 and the red line at $ 273 are important points to keep in mind.

Yesterday Tesla did a good reaction, it was not great, but not bad. Only good. The problem is that yesterday’s volume was low, and this could indicate that this reaction is just a Dead Cat Bounce.

I would be more convinced that the bull trend will resume if Tesla does a bullish pivot in the hourly chart, meaning, it must trade above $ 398.96. This would be a good start, and the reversal sign the bulls need.

And if you read this far, please, support this idea! And follow me to keep in touch with my daily analyses! I’m sure you’ll find something interesting around here.

Stay safe.