Tesla TSLA Surges with Market on Break to New Highs (but Watch the Weekly Chart)
Thu, Feb 9, 3:41 PM ET, by Corey Rosenbloom
Tesla (TSLA) shares continued their strong uptrend, breaking out to a new swing high this morning.
However bullish this price chart appears – and it does appear bullish – take a moment to see a critical level coming up on the Weekly Chart.
Let’s start with the Daily Structure:
Tesla (TSLA) also has appeared repeatedly on our member scans for “Strong Stocks Getting Stronger.”
We are very pro-trend friendly at Afraid to Trade, believing the core principle that “trends, once established, have greater odds of continuing than of reversing.”
The concept of “trend” also proves that markets are not random as some academics would have you believe.
Nevertheless, Tesla (TSLA) shares reversed up away from the $180 lower support level – on positive divergences – and continued a powerful uptrend that took price rapidly toward of the $280 resistance target.
What’s the $280 resistance target? Glad you asked:
We’re seeing a pure price chart of Tesla on the weekly timeframe.
What looked like a strong uptrend on the daily chart – and it was – simply was a rally up away from the $180 support toward the $260 then $280 upper resistance pivot which we can see clearly.
What’s the play now?
Put the daily chart uptrend rally within the context of the trading range – support/resistance – boundaries.
We’re nearing the highs and thus on guard for any reversal down away from the $280 level.
The alternative play would be a new bullish breakout to new all-time highs beyond $290 and $300.
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
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Corey's book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”
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