TESLA Stock - Is TSLA Bearish?

Summary

In this Tesla market update, the video analyzes recent price action, highlighting key support at 423 and resistance around 430–440. The daily charts show bearish patterns, including a shooting star and bearish engulfing candle, signaling caution, while the weekly chart hints at potential consolidation near Fibonacci resistance. The presenter discusses possible bullish scenarios, such as a bull flag forming in the high 300s–low 400s, versus bearish outcomes if support breaks. End-of-day options flow shows strong bearish sentiment. Overall, viewers are guided to watch critical levels closely, consider both bullish and bearish possibilities, and monitor price action day by day for the next moves.

Takeaways

• 📉 Tesla showed some short-term weakness despite recent gains, with bearish patterns forming over the past two days.
• 🔺 Gap ups in a strong uptrend can often indicate potential bearish reversals, contrary to common perception.
• 🛡️ Key support level to watch is around $423; holding this level is crucial for maintaining a bullish outlook.
• ⚠️ If Tesla closes below $423, it may trigger a larger sell-off and further bearish momentum.
• 📊 Short-term resistance levels include $430 and $440, forming a strong wall on the charts.
• 📈 A potential bull flag could develop if Tesla holds support and consolidates before attempting a breakout above $430-$440.
• 📉 The 4-hour SMI has historically provided reliable signals for Tesla, suggesting monitoring near the green zone could indicate buying opportunities.
• 🕒 Weekly charts show a bearish shooting star candle but three trading days remain, leaving room for change in trend.
• 💹 Options flow toward the end of the day showed significant bearish activity, indicating market participants are betting on further downside.
• ⚖️ Overall, the base case leans slightly bullish as long as key trend lines and support levels are maintained, but caution is advised due to warning signals.
• 🔍 Monitoring day-by-day price action is essential, with the next trading day being particularly critical for confirming bullish or bearish scenarios.
• 🧩 Potential downside targets if support fails include $410, $396, and the daily 21 EMA around the mid-380s.

Q & A

What is the primary concern with Tesla's stock after recent price movements?

The main concern is that Tesla has shown signs of weakness after a strong rally, particularly due to recent gap-ups which often lead to bearish reversal patterns like shooting star and bearish engulfing candles. This signals the possibility of a downturn if key levels are broken.

What key price level is crucial for Tesla's uptrend to continue?

The crucial price level for Tesla’s uptrend is around $423. If the stock holds this level, it could continue its upward movement. However, if it falls below this level, it could lead to further downside.

Why are gap-ups seen as more concerning than gap-downs in Tesla’s current market situation?

Gap-ups are more concerning because they often signal a potential bearish reversal. Historically, gap-ups in a strong uptrend can lead to bearish candlestick patterns, such as shooting star and bearish engulfing candles, indicating a reversal of the trend.

What would be considered a warning sign for further weakness in Tesla’s stock?

A key warning sign for further weakness would be if Tesla loses the $423 level and continues to show weak price action, such as breaking below $430 and triggering the bearish engulfing candle from the previous day.

How does the 4-hour SMI indicator help in analyzing Tesla’s stock?

The 4-hour SMI has been useful for predicting price movements, particularly when it crosses certain levels. If the SMI indicator returns to the 'green' zone, it may signal a potential buying opportunity in the $400 range.

What are the potential downside targets if Tesla breaks key support levels?

If Tesla breaks below $423 and loses more key levels, the downside targets could be around $410 or even lower, possibly down to the gap fill around $396. The stock could also retrace closer to the 21 EMA, which would be in the mid-380s.

What does the shooting star candle and bearish engulfing candle suggest for Tesla's stock?

The shooting star and bearish engulfing candles indicate bearish reversal signals. If these patterns are confirmed, it suggests that Tesla's uptrend might be weakening, and the stock could be preparing for a price decline.

What would signal a potential bullish reversal for Tesla in the near term?

A potential bullish reversal could occur if Tesla holds its trendline around $423 and shows strong bullish price action, possibly forming a bullish flag setup. A break above the current resistance levels could signal further upside.

How important are the Fibonacci levels in determining Tesla's resistance and support?

Fibonacci levels are crucial in determining key resistance and support zones. Tesla is facing resistance around the $430-$440 range, which aligns with Fibonacci levels. If the stock fails to break through this area, it could lead to further downside, but if it breaks through, it could continue its rally.

What impact do external market factors, such as news from JP Morgan or Trump, have on Tesla's stock price?

External market factors like news from influential figures such as JP Morgan, Trump, or even the Federal Reserve (JPAL) can significantly impact Tesla's stock price. Negative sentiment from such events can contribute to bearish movement, as seen with the increased bearish flow in options trading.