The fundamental environment is getting better for Tesla (NASDAQ 🙂 stocks. On Friday, the California-based electric vehicle manufacturer in Palo Alto announced a record number of vehicles in the first quarter of 2021.
That alone would be good news for the stock. The added sweetener? The biggest market engine right now is President Joseph Biden's COVID-19, a multi-part aid package designed to provide a stronger recovery for the reopening US economy. And one of the core programs on the Democratic agenda is tackling climate change, including tightening emissions regulations. As such, a key element in the government's green initiative to push drivers into electric cars is a clear victory for Tesla.
To this end, Wedbush tech analyst Daniel Ives yesterday upped his rating on TSLA to & # 39; Outperform & # 39; and gave the stock a target price of $ 1,000 within the next 12 months. That would be a 31% increase from yesterday's closing price of $ 691. He also gave a long-term view of $ 1,300, an 88% gain.
We expect the stock to reach $ 830 within a month. Three weeks ago, we argued that "Tesla stocks may have bottomed out." We believe yesterday's trading provided that confirmation.
TSLA Daily
On Monday, the stock completed an H&S panties when it crossed the pattern's neckline – the trendline (purple) connecting the pattern's lows. Next, it's worth seeing if we can identify the technical bottlenecks and understand how this reversal fits into the chart.
The H&S moved right within both the rising channel that emerged from the March bottom and the falling channel since the January 25th high.
Price has failed to maintain a secondary, steeper rising (green) channel since the October low, helping the price temporarily break away from the original channel. The prize was then awarded with its own H&S.
Note how both head and shoulder structures share the same neckline, which corresponds to the technical principle of a support turning into a resistance. These two V&S patterns are mirrored, and if yesterday's breakout continues, we expect the price to hit the January high of $ 883.09 again.
However, although the price was above its immediate (purple) neckline, and although that trendline provided support as the price dropped earnings on Monday, the price has found resistance through the original H&S (dotted) trendline since January 11th. The volume also remained flat.
We would like to see a spike in volume to increase the chances of a consensus for the outbreak. We see the same hesitation expressed in momentum through the RSI. After bottoming out and confirming a new base, the RSI found resistance from the previous support, broadcast through the H&S top (dashed red line).
The MACD, on the other hand, regained a bullish cross after failing to maintain the former when the stock price fell, creating the left shoulder.
Trading Strategies
Conservative traders should wait for the price to increase to $ 705, then stay above the neckline for at least 3 days, preferably including a weekend, and the Retest cartridge support.
Moderate traders would be satisfied with a closing price of more than $ 700.
Aggressive traders could buy shares at will, provided the risk suited their budget, timing, and temperament.
Here's an example of how to set up a basic trading plan:
Trade Sample
Entry: $ 690
Stop Loss: $ 680
Risk: $ 10
Target: $ 830
Reward: $ 140
Risk: Reward Ratio: 1:14
Author's Note: The above is a trade sample, not the actual analysis. That's in the post. If you haven't read it and don't understand the risk parameters, don't act. The word "monster" implies that there are other approaches that can be used for this trade. You need to develop your own style that best suits your needs depending on your resources, time and risk aversion. Until you do, take small trades to develop your skill. If you're looking for a lot of money, you won't learn anything, but you will definitely lose all your money, for the record. Have fun trading!
