-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Some views on current price action
- Thread starter jesselivenomore
- Start date
-
- Tags
- TSLA
The concern after February's monthly candle was that it was a reversal bar just like the other 3 times we've peaked around 280. Although there was a confluence of support at 240, a break below this level would have confirmed the monthly top. With March's monthly close yesterday, the reversal has been invalidated, so the 2013 analog, the potential breakout from the 3 year base, everything we've been talking about the past couple of months is back in play. I've already detailed what I think about those bigger setups, so let's just look at what's happening lately.
Remember that a chart is just a visual representation of buying and selling pressure. With that in mind, I am going to take a very simplistic look at what's different about price action now compared to prior peaks, and why that means a breakout is likely.
As you can see, whenever price has gotten to around 270-80, it has dropped sharply and immediately. The prior 3 times, buyers did not show up until 217 in 2014, 195 in 2015, and 203 in 2016. Price then formed a lower high which led to the stock being pressured for months. Simply, at 270-80 the stock ran out of buyers/ran into an influx of sellers. Buyers did not reemerge until the low 200s, but even then there was not enough of them to carry the stock above the prior peak, which results in a downtrend. (Buyers < Sellers)
In contrast, buyers started stepping in at 242 this time around, a much higher level than prior, and there was enough buyers to carry the price back up to 280(again much higher than prior instances), nearly equaling the prior peak(so far). This is a very different buyer vs seller profile compared to the other times when the stock peaked, obviously much stronger, and portends to a resolution to the upside.
With that said, shortterm we are going to be impacted by the number coming out Monday. I don't really see us breaking out from a 3 year consolidation just on quarterly sales numbers alone unless it is blowout, or they preannounce positive earnings. Otherwise, a neutral or light number will probably pull the stock back. That gap at 270 does look like it wants to get filled(just my opinion). However, now with the monthly charts back to being bullish, I am not too worried about any pullbacks as long as we stay above 240. If we do get a pullback we would just be forming a high level consolidation at 240-80(Buyers = Sellers), awaiting a catalyst for the final breakout. (Buyers > Sellers)
Remember that a chart is just a visual representation of buying and selling pressure. With that in mind, I am going to take a very simplistic look at what's different about price action now compared to prior peaks, and why that means a breakout is likely.
As you can see, whenever price has gotten to around 270-80, it has dropped sharply and immediately. The prior 3 times, buyers did not show up until 217 in 2014, 195 in 2015, and 203 in 2016. Price then formed a lower high which led to the stock being pressured for months. Simply, at 270-80 the stock ran out of buyers/ran into an influx of sellers. Buyers did not reemerge until the low 200s, but even then there was not enough of them to carry the stock above the prior peak, which results in a downtrend. (Buyers < Sellers)
In contrast, buyers started stepping in at 242 this time around, a much higher level than prior, and there was enough buyers to carry the price back up to 280(again much higher than prior instances), nearly equaling the prior peak(so far). This is a very different buyer vs seller profile compared to the other times when the stock peaked, obviously much stronger, and portends to a resolution to the upside.
With that said, shortterm we are going to be impacted by the number coming out Monday. I don't really see us breaking out from a 3 year consolidation just on quarterly sales numbers alone unless it is blowout, or they preannounce positive earnings. Otherwise, a neutral or light number will probably pull the stock back. That gap at 270 does look like it wants to get filled(just my opinion). However, now with the monthly charts back to being bullish, I am not too worried about any pullbacks as long as we stay above 240. If we do get a pullback we would just be forming a high level consolidation at 240-80(Buyers = Sellers), awaiting a catalyst for the final breakout. (Buyers > Sellers)
Last edited:
Well, apparently the delivery numbers beat everyone's expectations. Maybe this is a breakout. Next wild card is the earnings report.
If this breakout holds, the standard measured move is an extension of the trading range. 180-280 was the consolidation range, so a breakout measures to 100 points higher, 380. I think this is what you would see from a lot of technical traders. However, this would fail to take into account the length of the consolidation. The longer the timeframe of the consolidation, the more built up pressure once it breaks. If it was a 1 year range of $100, I would be comfortable with a measured move of $100, but after over 3 years, the potential upside is now higher.
With that said, again IF this breakout holds, there isn't going to be a lot more actionable trades from me going forward. To me it is all about doing the preparation work to set up the trade - what we've been doing now the past few months - but once the trade is put on(and I am out of bullets now) it is time to just sit tight and wait. It will either work out, or if it is a fakeout then I'll have to manage it. Not much else to say or do.
With that said, again IF this breakout holds, there isn't going to be a lot more actionable trades from me going forward. To me it is all about doing the preparation work to set up the trade - what we've been doing now the past few months - but once the trade is put on(and I am out of bullets now) it is time to just sit tight and wait. It will either work out, or if it is a fakeout then I'll have to manage it. Not much else to say or do.
Sure. So I am in and out of TSLA for swing trades the past few years. My standard position is about 20% of my overall portfolio. The last one I entered was a buy around $200, which I did not post here. I started exiting this trade at around $240, the day after the Morgan Stanley upgrade. However, almost immediately after exiting, I noticed bullish developments that I missed on the monthly timeframe which indicated a possible breakout from the 3 year consolidation. Analyzing the likelihood of a breakout and how to take advantage of it is the "trade" I am talking about. So instead of selling, I actually ended up doubling my position and posted here:
I expanded on the reasoning behind this trade by bumping this thread, starting with:
I hedged this trade when SP went outside the bollinger bands on 2/14 before ER:
And took the hedge off in the 250s.
Lastly, I mentioned a few times that I would top this trade off by completing my final few buys when/if we got above 287. That happened today.
Going forward, in order for this trade to work out, we should hold above $270. And on the upside, I am looking for a minimum of $380, where I would look to hedge if price action dictates, but hopefully not.
@jesselivenomore and @TrendTrader007
What are your thoughts on Elliott wave patterns? Andrew McElroy on SA published an interesting SA article about TSLA following Elliott waves: The Tesla Break Out May Be Good News For Bears - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
What are your thoughts on Elliott wave patterns? Andrew McElroy on SA published an interesting SA article about TSLA following Elliott waves: The Tesla Break Out May Be Good News For Bears - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
I don't buy it, but not an Elliot Wave expert. Then again, I hope the bears buy it. More shorts the better.
I don't use EW because the way you draw it can be too subjective. When it doesn't work out you can always justify it as being in a different wave or count. For my trading I need clear cut right and wrongs in order to cut my losses.
I don't necessarily disagree that this could be a fakeout. I don't see it that way, and I am surely not going to try to anticipate a fakeout, but I guess anything is possible. If price action changes I'll evaluate and adjust. As long as we stay above 270(really 280), things look fine.
Also I don't agree with him that the incremental buyer here is only the technical traders looking for the last 5%. For one, you'd have to be a pretty ****y technical trader to look for only 5% on a 3 year monthly breakout. Two, some of the buyers here are shorts getting margin calls - they are not jumping back in even if price goes back down, because they're now broke. Also I don't really think the Tencent's of the world are scalpers of 5%(or even 50%).
Last edited:
TrendTrader007
Active Member
the guy writing that article may be a TA genius but i doubt he makes any real money in the stock market. the only way to make big money in the stock market is to see the obvious and bet big. Period. End of story. let me digress a bit here and define the difference between losers and winners. a loser sees an opportunity and does not take it because of million reasons. a winner sees an opportunity and grabs it despite million reasons not to because a winner is focused on winning. and winning alone.
now the obvious is, as any village idiot will tell you: TSLA is breaking out big time out of a 3 year long range on great volume. they say no one rings a bell at the bottom. well, in this case Elon himself is telling you that shorts are basically toast and that stock is going higher.
i do not listen to these inane pseudo- academic TA nonsense on sites like seeking alpha but instead i do my own thinking and bet big on a winning hand. and right now TSLA is the hottest hand in the casino. and will remain so for some time to come
Last edited:
My success on Tesla is entirely due to having a coherent future valuation model and buying with both hands whenever the price drops below the lower end of my valuation model. :shrug: Theoretically I would sell when the stock went above the upper limit of my valuation model, but for reference, the *upper* end of my valuation model is somewhere above $1200, and as a result I haven't bothered to redo it recently!
Similar threads
