Here’s your trade on Tesla ($TSLA) (October 14, 2020)
TSLA
I want to go back to Tesla ( NASDAQ: TSLA ). I have covered this stock a few times recently looking for this pattern to resolve itself. This is a symmetrical triangle, people call it that, fine, I just call it a squeeze. The stock has been slowly kind of pinching together, where you get a high and then a low. And then a lower high, then a higher low and then a lower high still, and a higher low, so you have got these converging trendlines.
Well, the technical analysis rule is, on a triangle the further towards the apex the stock goes the less likely it is that the stock is going to break out, right? In other words, the more likely it is that it is going to fizzle. Okay, that’s fine but that’s a rule that (I hear people say that from time to time), that’s a rule that is really more applicable to flat triangles, where there is a stock that’s trading in a flat top right here, every time the stock gets up to $500.00 it just stalls out.
But then the stock is hitting these lows and it’s coming up, it’s up here and then it’s coming up and all that. So it’s hitting these higher lows but it’s never really breaking out. The idea is on this type of thing, the closer the stock gets to this apex the more likely it is to fail. That’s not what this is, this is a symmetrical triangle; there is no hard line of resistance here, there’s not.
This is an issue of “we cans” versus buyers. The stock comes up; people are selling. The stock goes back down, people are buying. Gradually the “we cans” are getting out of the stock and there are new guys coming in. And so we are looking for this breakout, finally see it on Monday and the stock, boom. Today it actually shot up really, really nicely.
I do not think that it is too late to get into this stock. This is something that Stock Market Mentor members have been on this week. They were hitting it in the forum today, we’ve been looking and waiting for this breakout. In fact, if you are not a member you are probably still good on this because I have been doing Free Chart work on this, in my Chart of the Day. So one way or another hopefully you are in this stock.
This is my WAG, it stands for, wild asterisk guess. I think that probably even by the end of the week, the way this stock is moving, I think this thing can run up to $500.00. It is really starting to get some good pin action; the company reports earnings on the 21st. So look, when the “church of Tesla ( NASDAQ: TSLA )” gets going you are going to see some big moves here. I think this stock has a lot of potential even now.
I would just keep a stop a little bit below today’s intraday low if you are a short-term trader. If you are not, hey, here’s your bogey; the stock just keeps drifting higher. Be there, hang onto it, hang onto the ride and you are going to do just fine.
Free Chart