TESLA Stock - Big Earnings Move Coming?

Summary

In this Tesla stock update, the analyst discusses the stock's recent performance, offering insights into potential movements. He highlights the key support level around $320 and the importance of earnings tomorrow. The analysis includes a focus on technical indicators, including exponential moving averages (EMAs) and the potential for bullish setups, like a bull flag or wedge formation. The analyst also addresses the unpredictable nature of earnings and the potential for implied volatility crush. Overall, he leans bullish but notes that consolidation could continue into mid-August, with an ideal scenario being a strong support hold around $320.

Takeaways

• 😀 Tesla's stock closed at $332 per share, showing a 1% increase, with a potential for more bullish movement if the 320 price level holds post-earnings.
• 😀 The technical setup is still evolving; while there was a quick bounce after a slight pullback, the ideal scenario would be to see more compression before a big move up.
• 😀 Earnings tomorrow create a major uncertainty, and while technical analysis offers insights, predicting earnings is impossible.
• 😀 The key support level for bulls is around $320, and if this level holds, there’s a good chance for upward momentum in the following weeks.
• 😀 If earnings cause the stock to dip below $320, a retracement to $300 could occur, but it would still leave room for a bullish reversal in the long term.
• 😀 Shorter timeframes, like the 15-minute or 1-hour charts, are critical in identifying early signs of whether Tesla’s stock will pull back further or continue upward.
• 😀 A strong liquidity sweep occurred recently, indicating that Tesla could potentially recover swiftly if it maintains key support levels like $328.
• 😀 The likelihood of a 'bull flag' or similar consolidation pattern forming on the charts remains high, suggesting potential bullish behavior if the stock price stabilizes.
• 😀 Implied volatility (IV) has risen ahead of earnings, signaling expectations of a large price movement, but any move smaller than the predicted range could lead to an IV crush, hurting option buyers.
• 😀 Overall, the stock is currently in a large daily pennant pattern, suggesting more sideways consolidation until a decisive breakout in mid-August, with a leaning towards bullishness.

Q & A

What is the main focus of the video?

The main focus of the video is an analysis of Tesla stock, its current performance, and potential future movements in the market. The presenter discusses technical analysis, key support and resistance levels, earnings expectations, and what might happen post-earnings.

What is the significance of the $320 level for Tesla stock?

The $320 level is seen as a crucial support zone for Tesla. The presenter believes that as long as Tesla holds above this range, particularly post-earnings, there is potential for the stock to move higher. If the price falls below $320, it could signal further downside risk.

What technical indicator does the presenter mention when discussing Tesla's short-term outlook?

The presenter mentions several technical indicators, such as the exponential moving averages (EMAs) and the MACD. The EMAs are used to track support and resistance, while the MACD is referenced as a bullish signal when it flips positively.

What is a liquidity sweep, and why is it relevant to Tesla's stock?

A liquidity sweep occurs when a large sell-off triggers stop losses for many traders, causing a sharp drop in price. The presenter identifies a recent liquidity sweep for Tesla as the price quickly recovered, suggesting that it could move in the opposite direction afterward, which is a positive sign for the bulls.

What is the presenter’s prediction regarding Tesla's earnings and the stock movement afterward?

The presenter predicts that Tesla's earnings could lead to an implied volatility (IV) crush, where the stock may move less than the market expects, potentially staying within its current range. This is due to the high implied volatility priced into the stock before earnings, which often leads to smaller-than-expected movements after the event.

How does the presenter view the potential for Tesla stock over the next month or two?

The presenter is optimistic about Tesla's long-term potential, provided that the stock holds above the $320 range. They believe that the stock could follow a pattern similar to a bull flag setup, leading to higher prices over the next month or two, with potential for a breakout if conditions remain favorable.

What role does the SMI (Stochastic Momentum Index) play in the analysis?

The presenter notes that the SMI is currently at the upper end of its range, suggesting that Tesla may experience consolidation or a pullback before making a move higher. They compare the current setup to previous market behavior where the SMI indicated a period of consolidation before a move to the upside.

What would be considered a bearish scenario for Tesla based on the technical analysis?

A bearish scenario for Tesla would occur if the stock breaks below $320, especially if it closes below key levels like $315. This could trigger a larger downside move towards $300, although the presenter notes that this wouldn't necessarily negate the stock's longer-term bullish potential.

What is the significance of the 335 level for Tesla stock?

The 335 level is a crucial resistance level. If Tesla can break above 335, it could open up the possibility for further gains into the 340s, which would test the upper boundaries of the current pennant pattern in the stock.

What is the presenter’s overall sentiment regarding Tesla stock in the short and long term?

In the short term, the presenter acknowledges uncertainty due to earnings but remains generally bullish if Tesla can hold above $320. In the long term, they are optimistic about the stock's potential for growth, especially if a strong setup forms and Tesla can maintain key support levels.