Tesla (TSLA): The Calm Before the Storm?

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The storm seems to have arrived. Tesla breakout the trendline and is currently 15% off its all-time high of $ 1794.99.

What will happen now?

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After months of unstoppable growth, Tesla started showing lateral movement starting from the all-time high reached on July 12, 2020, without moving decisively in one direction.

In addition, it is showing lower daily volatility in recent days than in previous weeks, a possible sign of an apparent calm before it burst up again.

On the occasion of the last earnings report published (22 July 2020) Tesla seemed to be able to resume the positive trend in place until a few days earlier, but in reality it closed the day in a negative way. In fact, in reaction to the publication of the earnings report Tesla had opened with a rise of + 5%, and then collapsed by 10% during the day and closed it at -5%.

Events that could lead to a decisive price movement

Tesla is a stock to be included in your watchlist because in the coming days there are mainly 2 events that could lead to a decisive price movement and that need to be monitored.

1. Trendline Breakout

As previously anticipated, Tesla has been showing lateral movement for a few weeks and volatility has decreased in recent days. These movements have created a series of decreasing maximums and increasing minimums (indicated by the trendline drawn in the image below) and in the event that the trendline that combines the decreasing maximums is overcome, the positive trend may start again.

If you follow the BullDude.com newsletter, a few weeks ago I reported a possible Shopify trendline breakout, which was showing a pattern very very similar to what is forming on Tesla. Shopify on June 15, 2020 breakout to trendline and from there began a rally that has led the price to increase by 35% to date.

In the event that this event should occur it will be promptly reported here on BullDude.com within the article that includes the companies that on that particular day breakout a trendline.

What would be the first price target?

If the upward trendline breaks, the first target would be the all-time high of $ 1794.99 reached in the trading session on July 13th, which is currently about 20% distant.

In the event of a downward breach of the trendline that joins the rising lows, the first level to monitor would be $ 1353.64, a level below which the current positive trend could stop.

This level does not indicate the price below which to open a short position because making an operation on a company like Tesla is very risky, in the past many traders have paid dearly for this move.

2. Nio’s earnings report

Chinese rival Nio will release the earnings report on Tuesday 11 August. Sometimes it happens that the particularly positive or negative earnings report of a company influences the price trend of similar companies, so this will be an event to be monitored because it could influence Tesla’s performance.

As you can see from the graph above, the trend of Tesla (red line) and Nio (black line) from the beginning of the year is very similar. Tesla in 2020 grew by around 255%, while Nio by 245%.

In conclusion…

In conclusion, as always BullDude.com aims to give you all the necessary information every day so as not to miss the opportunities.

Here at BullDude.com Tesla has appeared in several articles because during this incredible price increase it has often exceeded key levels, which have allowed the price to continue to rise.

One of these articles was published on BullDude.com on March 20, 2020 called “3 Popular Stocks Breakout a Key Moving Average Today” and signaled Tesla’s rise above the 200-day moving average. That day Tesla was worth $ 427.64, while it is now worth $ 1489.58, an increase of over 248% in less than 5 months.

The information in this article is for informational purposes only and does not constitute investment advice.

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