Tesla, Inc. (NASDAQ:TSLA) fell below $200

Tesla, Inc. (NASDAQ:TSLA) fell below $200

Tesla, Inc. (NASDAQ:TSLA) fell below $200

This week was a big week in tech. Tesla Inc. (NASDAQ:TSLA) fell below $200 and closed the week below that round number. Half a year ago, very few Tesla bulls would have thought Tesla would trade where it is. Some believe Tesla shares could go lower given its cash burn. Others believe Tesla’s demand is stronger than what the market expects and things might improve. We can only watch now as Tesla’s stock moves makes more news than its cars. Of the around 700-740 elite funds we track, 47 funds owned $878.62 million of Tesla Inc. (NASDAQ:TSLA) on December 31, versus 31 funds and $373.71 million respectively on September 30.  Tesla isn’t the only stock that trended this week. Let’s analyze four more. Read on to find what they are.

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We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 252.20.

The projected upper bound is: 210.79.

The projected lower bound is: 166.50.

The projected closing price is: 188.64.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend. It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend (which appears to be the case with TESLA INC), it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 15.1732. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 23.42. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 19 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -105.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 16 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 9 period(s) ago.

Rex Takasugi – TD Profile

TESLA INC closed down -4.860 at 190.630. Volume was 38% above average (neutral) and Bollinger Bands were 54% wider than normal.

Open High Low Close Volume___
199.830 199.980 188.751 190.630 14,136,572

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 211.99 253.35 298.94
Volatility: 61 56 71
Volume: 14,855,212 11,406,412 9,717,861

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

TESLA INC is currently 36.2% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of TSLA.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TSLA.O and have had this outlook for the last 30 periods. Our momentum oscillator is currently indicating that TSLA.O is currently in an oversold condition. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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