TSLA runs into sellers again around 831.78
Tesla Inc. (TSLA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
TSLA finished the week 2.22% higher at 816.88 after losing $10.72 (-1.3%) today, significantly underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Trading $9.61 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (TSLA as at May 22, 2020):
Friday's trading range has been $19.78 (2.41%), that's below the last trading month's daily average range of $41.58. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for TSLA. Prices continued to consolidate within a tight trading range between 796.00 and 834.72 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 796.00 (S1). After having been unable to move above 832.50 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 831.78. The last time this happened on Wednesday, TSLA actually gained 1.48% on the following trading day.
While the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the close-by swing high at 832.50 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 796.00 where further sell stops might get activated. Further buying could move prices higher should the market test April's close-by high at 869.82.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Tesla. Out of 726 times, TSLA closed higher 53.58% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.79% with an average market move of 1.76%.