TSLA: Is it Oversold?TSLA shares have lost their most important support level, around $230, and we are getting close to our next support, around $206, and such a move was detailed in our last public analysis, the link to which is below this post, as always.
As we can see, TSLA shares have consistently failed to react around their support levels, showing great weakness, and so far, we don't see any reaction that would justify a recovery, or that could trigger a bullish move.
The RSI is at low levels, below the 30% line, while it lost the 50 and the 200-period moving averages – however, there is no Death Cross yet. What’s more, TSLA has been dropping, losing all of its support levels, without any sign of struggle. A typical crash.
It's a fact that the stock is well discounted, in oversold territory. Whether this is a reason for a bullish reaction is anyone's guess. The next big catalyst will be next week's results release. S ince we're approaching a critical support zone, and with the sell-off theoretically exhausted, this could be a promising turning point.
Another important question is for how long will TSLA remain detached from the broad market? The indices are clearly bullish, and they have been for a while. Tech stocks are performing well, and the M7 are looking great compared to TSLA.
It all depends on how TSLA is going to react now that it is close to the $206 support. Remember, always wait for confimation on the price. Any bullish reaction could trigger a short-term bounce to higher levels, the problem is that the mid-term trend is bearish, and it would be important to se TSLA breaking the 21 ema on the daily chart, along with the $230 resistance, to reverse this bearish sentiment. Only then, I’ll see a technical reason that could convince me of a better recovery – otherwise, we may see just a Dead Cat Bounce.
I’ll keep you updated on this, so remember to follow me for more analysis like this.
All the best,
Nathan.
