Let’s keep an eye on $TSLA, Scott believes it’s at a key crossroad – January 27, 2022

by DAN TSLA 
This is Scott with your Chart of the Day. I want to take a look at Tesla ( NASDAQ: TSLA ). I believe Tesla ( NASDAQ: TSLA ) is at a key crossroads here on this chart and I will tell you why. As you can see it has been quite a bumpy ride the last couple of months since Elon Musk sold his shares. I think he sold a lot in this area and some in this area and ever since then it’s just been whipping around and chopping around.

Today we pulled right back down to this blue line, that’s the 200-day simple moving average on the chart. Now, I believe Tesla ( NASDAQ: TSLA ) is at a key crossroads here because every time the stock has come down to this 200-day moving average. In the past year or so it quickly, usually, recovers around the 200-day moving average.

You can see back here in May, June, July of 2021 it came down to the 200-day, finally got back above. Came back down, came back up. Down, up, down up, down up. And so this is a really key level for this stock and I think we should definitely be keeping an eye on Tesla ( NASDAQ: TSLA ) around this zone because if we don’t hold around this 200-day moving average and we close below 4 consecutive days it could be a bumpy ride.

Now, I will show you what happened to Tesla ( NASDAQ: TSLA ) in the past when we were unable to get above and close above the 200-day moving average. If I zoom back here to 2019 you can see. Now, while the patterns aren’t very similar what I want to point out is the fact that once we broke below this 200-day moving average, and it was a clearly defined level of resistance, it broke down, couldn’t hold above. It got back above, couldn’t hold above. It was just a brutal ride for Tesla ( NASDAQ: TSLA ) but that ended up turning into a great opportunity for long-term investment.

There are really 2 ways to look at this chart, in my opinion. A chart that is definitely breaking down but also a chart that could potentially have a lot of opportunity in the future. So I want to stay open-minded with Tesla ( NASDAQ: TSLA ) in general. But first I want to make sure that it holds above that 200-day moving average because if it doesn’t then I probably don’t want to be involved in this stock for anything more than a quick rebound swing trade type of move because this big drop here is definitely not fun even if you have strong conviction in a company.

I don’t care how strong your conviction is, sitting through this I’m sure wasn’t fun for anyone. So like I said, I really want to keep an eye on Tesla ( NASDAQ: TSLA ) and see if it can hold above this 200-day moving average, this blue line on the chart, as it has held above the past year-and-a-half or so. So keep an eye on Tesla ( NASDAQ: TSLA ), it could be a great opportunity or it could be a car that you just want to get out of the way of, we will have to see, let’s watch together.

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