Time to check in on Tesla as the markets recover from the virus volatility and we head into the rally before Christmas. At least that’s the theory with Santa’s workshop in full swing as his helpers load the sled for the annual run, bringing good cheer to one and all, but will this apply to Tesla too?
The daily chart has developed much as expected and regular readers will know the defining candle on this timeframe is that of the 9th November largely triggered by Elon Musk selling, but nevertheless setting the pattern of what we were likely to see in the forthcoming days and weeks which has indeed been the case. Once this candle had appeared coupled with high volume and the volatility trigger as the price action had moved outside the average true range, either congestion or a reversal would follow, and in this case, we are witnessing the former.
Moreover, the likelihood of this happening was further reinforced by the presence of the volume point of control at $1050 per share which whilst representing the fulcrum of the market where price agreement has been reached also provides support. Within the range of the vpoc is where price will remain until we see a firm move away, coupled with increasing volume.
Yesterday’s price action was another of indecision, the session closing with a Doji candle on good volume, thereby confirming the current lack of direction at present as Tesla remains rangebound between $1020 below and $1175 per share above. A wide range by any standard, but for Tesla one which can be breached in a day’s trading. A rally to the upside and through the $1175 per share moves the price into a low volume node on the VPOC histogram and hence into easier waters for a further run higher. On the downside, a similar low volume node awaits in the $975 per share area, and if approached would lead to a fall, possibly even to $800.
However, in the meantime, patience is required as we wait for meaningful levels to be breached. Volume, as always, will confirm any sustained move as the primary indices struggle for direction and move in whipsaw. Santa definately needs to bring his influence to bear but whether he will, only time will tell as we approach the final trading weeks of the year.
By Anna Coulling
Charts from NinjaTrader
Leave a Reply