Tesla, Inc. designs, develops, manufactures, and sells electric vehicles and energy storage products in the United States, China, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. It primarily offers sedans and sport utility vehicles.
Take a look at the 1-year chart of Tesla (NASDAQ: TSLA) below with my added notations:
During the past five months, TSLA has formed a clear level of resistance to watch at the $360 (red) mark. The stock has tested that mark multiple times since the beginning of October. A solid close above that $360 level would most likely lead to higher prices for TSLA.
The Tale of the Tape: TSLA has a key level of resistance at $360. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $360.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT