Think Tesla ($TSLA) is done? Think again – November 29, 2024
Dan Fitzpatrick here at StockMarketMentor.com. We’re coming into the weekend and one thing I want to point out is Tesla ( NASDAQ: TSLA )
The stock has been grinding right along here. The stock first looked like it was going to break out a week ago on the 22nd. Volume was, I’ll say, fairly high, not even above average volume. However, we’d seen these big massive volume spikes here that dragged the average up over the last 20 days.
I looked at this and thought, you know what, that’s a pretty decent time to start a position, which we did. And then the stock fell down a bit but it’s still holding its own here. So as I look at this stock I see it just kind of trending sideways.
From a political view governments are involved, but it’s not really political in my mind, it’s just money-wise. I think Gavin Newsom, the idiot who runs California, has put something out where every EV gets an incentive except Tesla ( NASDAQ: TSLA ). That’s a political thing as most people should know because there’s no reason to ex Tesla ( NASDAQ: TSLA ) out of that.
Over in Europe, there is a real clamoring from, I think it’s Ford, asking the UK to really, really put the hammer down on people that aren’t driving EVs. I don’t mean that in a bad way, but to give such massive incentives and even mandates because effectively their stuff isn’t selling.
It’s one thing to say the world is going to come to an end or whatever it is. That’s fine, everybody has different thoughts on that. But when the average consumer says, that’s all well and good but I want to be able to fill up my car with gas rather than wait at a charging station.
That’s the kind of thing that consumer demand is going to have something to say about it. As opposed to government mandates or government intensives to buy this car and we’ll give you x amount of dollars and it’s going to be awesome, trust us. If people are saying, Yeah, I get that but I’m still not willing to do that, then that’s going to be a real problem.
I think therein lies the rub with EVs. The intention is there, definitely, the facilities are there everybody’s got to make all these EVs. But the average consumer, one by one, it’s a little bit like voting, it’s a little bit like going through the self-checkout, as opposed to the typical checkout stand at the supermarket.
You’re doing what you’re doing and you’re not really telling anybody. You’re not taking out ads and telling people what you’re buying at the store or who you’re voting for, for example, stuff like that. You’re not doing that. And so it’s the same thing with buying a car, you’re buying one car. You can be looking around and going, I really feel self-conscious about buying a Ford F150 but that’s what I want. That’s what people are going to be doing.
My point is, all the big forces that are trying to push people to drive EVs, again, I’m not making a judgment call on that, we own one. But all of those things, you can see all the headlines, but what you really got to do is say, Okay, well what are the charts telling me, what are investors doing? And that gets me back to Tesla ( NASDAQ: TSLA ).
Tesla ( NASDAQ: TSLA ) is really being singled out in not a good way in the People’s Republic of California, where we’ve lived under siege for quite a while. But then also, over in the UK, but the stock doesn’t care. That’s why I’m looking at Tesla ( NASDAQ: TSLA ), and even though it’s run up as it has, it still looks pretty good to me.
You can see this is kind of a ‘grindy’ stock, running up and down, but a lot of time spending it above the upper Bollinger Band, which is a sign of strength. On the daily chart, it’s not really doing that. It was for a while, but now it’s in this consolidation phase.
So this is my suggestion to you, look at Wednesday’s intraday low of 326.59. You can use that as a reference for your stop. You can certainly look at this last high here as your reference for a breakout level, we’ll call it 362.00. This is just the box that this is grinding into.
But in order even to start taking an early position on this you can do this right here. As long as you’re protecting your trade at, say, 5 percent loss, something like that. You’re starting small and then you’re keeping a stop, again, just below Wednesday’s low of 326.59, so 326.50 even, that’s a little over 5 percent loss, 5.5 percent.
That way you can get an early start on this. This isn’t the best entry, frankly, but the best entry only comes along every so often. This is an entry, it is an entry that could work as long as the stock holds above the 8-day. If it starts closing below the 8-day EMA then you can say, Well Dan, your trade idea didn’t work. And I would say, you’re right, it didn’t.
Also one last thing, we need to see volume. We need to see volume coming up here. We didn’t see any today, but that’s to be understood, it’s Friday, a trade-shortened day. After a holiday yesterday, you’re never going to get a lot of volume there. So we’ll watch and see what happens on Monday.
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