While most conventional automakers had a disappointingly slower 2021 due to chip shortages hampering production and deliveries, along with soaring inflation weighing on sales, Tesla (NASDAQ:) – always contrarian – took the fastest route.
After the Austin, Texas-based electric vehicle manufacturer announced yesterday it had shipped 308,600 cars in the fourth quarter, pushing annual sales to more than 936,000 vehicles, an 87% increase from the previous year, the stock rose in pre-market trading on Monday. Shares of TSLA are currently up over 7% and trading at $1,134.68 at the time of writing. That's a nearly $80 profit this morning.
The astonishing performance makes Tesla's fundamentals breathtaking in a positive way, but the short-term technicals of the stock seem more challenging.
Stocks are trading in a bearish channel since their all-time high on Nov. 4. Can bulls overcome the bearish pattern in which supply dominates the trend? The broader picture could provide an answer.
This expanded view makes it clear that the daily descending channel is only short-term. In the longer term, the trend is clearly upward. It has been clearly defined in the rising channel since the March 2020 bottom, supported by the 50 WMA.
Even as investors have raised the previous price of $1,126.50, traders have broken the top of the bearish channel, suggesting that the short-term price will now return to the long-term uptrend.
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Trading Strategies
Conservative traders should wait for price to confirm the breakout by retesting the top of the broken short-term bearish channel.
Moderate traders would wait for a decline in purchasing.
Aggressive traders can now go long, following a trading plan that takes into account their timing, budget and temperament. Here's an example:
Trade sample
Admission: $1,125
Stop Loss: $1,100
Risk: $25
Target: $1,225
Reward: $100
Risk Reward Ratio: 1:4
