Interestingly, however, the electric vehicle leader’s stock isn’t collapsing along with the rest of the market — it’s mostly doing it alone.
Just a few months ago, the FAANG group, Microsoft (MSFT) – Get a free report and almost every other stock was under tremendous selling pressure. But Apple (AAPL) – Get a free report and Tesla held strong as megacap tech relative strength leaders.
While Apple is still holding up somewhat, Tesla shares continues to carve new 52-week lows.
CEO Elon Musk takes over as CEO of Twitter in combination with Tesla disappointing stock reactions to both earnings and shipments in the third quarter leaves the stock without any bullish momentum.
When to buy Tesla stock
Tesla shares posted back-to-back weekly gains in mid-October, but beyond that, they have declined in eight of the last 10 weeks.
Last week gave investors an insider’s week, meaning its weekly trading range was completely subsumed within the previous week’s range. But with Monday’s 6.5% drop to a 52-week low, we have inside-and–down weekly rotation.
Today’s decline made me focus on the downside.
The first area of interest is $167.50. We have two notable weekly highs near this level before Tesla stock finally breaks out in November 2020.
But for Tesla to be able to break above $167.50, it first had to close above $150, which was a very key breakout area on a daily basis. So that’s the range I’m watching: $150 to $167.50.
Between the two levels are the 200-week and 50-month moving averages and the monthly VWAP measure. Tesla shares Must found some support somewhere in that range.
More aggressive traders can buy closer to the $167.50 area and the 200-week moving averagewhile more conservative bulls may look for an entry closer to $150.
On the upside, I expect resistance in the $200 to $205 area and from the descending 10-week moving average. For now, though, I’m very focused on seeing how Tesla stock handles the $150 to $165 area.
If this is support, long-term bulls and traders may find an attractive risk-reward opportunity in this zone. If not, we have a clear line in the sand when to bail out.