Tesla wants Frickin Laser Beams on their cars – September 8, 2021
TSLA
This is Scott with your Chart of the Day. I don’t know if you heard but evidently, Tesla ( NASDAQ: TSLA ) wants to put laser beams on their car as windshield wipers. Now, I love Elon but he guy is a character. For real, they want to put laser beams on the car as windshield wipers. Now, here’s what that would look like. They have secured a patent for this and, I don’t know, I wouldn’t bet against Elon, that could actually happen.
How can you benefit, as an investor, from this information? Well, the stock itself didn’t really do much today. As you can see we had a little bit of a pullback to this orange line, the daily 8 exponential period moving average, but it really just kind of chopped around today. So if I was to start a position in Tesla ( NASDAQ: TSLA ) for the first time, what I would want to do is really just kind of get a position close to some of these lines, close to these major moving averages because at least then you have some clearly defined levels to define your risk off of.
Like, if I was to buy here, this gray line, which is the 21-day exponential period moving average, if I am buying and the stock is here I know a decisive close below that level on higher than average volume is probably something that I would want to sell. I would want to get out of the way and wait for the stock to just kind of reset. But as you can see right here the stock is about 2.25 percent away from that daily 8 exponential period moving average.
If you were to define your risk off of this orange line, which is the closest moving average that I have in this chart you would really have to be risking 2 percent to know if you’re wrong or not. To put that in some sort of context, if I was to buy 10 shares of Tesla ( NASDAQ: TSLA ) I would have to wait to see if it would close below this line here to know whether I am wrong or not, and on 10 shares that’s $200.00, which isn’t nothing. So you are basically risking $200.00 just to see if you’re wrong or not in the trade.
So what I would do in that case, is just kind of wait for the stock to come back to these moving averages and build a little sideways base of consolidation like it did back here in late August. As you can see, in August the stock popped up through the moving averages, we had a nice sideways base of consolidation and then followed through with a nice move on higher than average volume. That is what I would wait for on Tesla ( NASDAQ: TSLA ) right now. I would wait for the stock to build a little bit of a sideways base of consolidation and at least give you a little bit of a floor to use to define your risk.
Little bases like this are great because you know you have a few days in a row where the bears had a chance to push the stock lower but were unable to. So it just kind of gives you a little bit of a solid foundation to define your risk off of when you are initiating a new trade. I hope that makes sense and that is kind of what I would look for here on Tesla ( NASDAQ: TSLA ).
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