A Macro Analysis of TESLA: The Case For Being Range Bound
Updated
Hi guys and Welcome!
As a trader its empowering to overanalyze an asset you would like to trade.
To think of various potential associations or the direction that price action can have or go.
It reduces any surprises and allows for you to be ready and strategize adjustments.
And just NOTE: That this is just an idea/ theory and it does not have to play out as mentioned but i would urge us to atleast keep this idea in the back of our heads.
Things have been great this year, with many big names booming in price.
Many people calling for New ALL TIME HIGHS for many names.
This is also true for TESLA.
But what if we don't see all time highs in Tesla? What if in fact we are range bound, hitting the top of the range only to travel to the bottom of the range for a duration of time before we attempt new all time highs.
It sure is a possibility, as we have done so previously.
From July 2013 till the breakout in December 2019, we managed to stay in a RANGE.
(Roughly 2345 days or 6ish years).
This is not a bad thing per se. It helps the asset consolidate, create market structure and allows companies to stabilize, allowing them to fulfill the desires of investor sentiment, thus moving higher eventually.
If you can determine the levels of the range, it is also tradeable. More on that in future posts, as i will be monitoring TSLA like a hawk.
Now looking at our current RANGE. We've gone so far 1093 days. If history is any indication, we are about almost half way through our RANGE bound journey.
Note that if we are range bound, it doesnt have to mirror our previous data point.
Also that Investor SENTIMENT for TSLA is different now.
Also don't discount the fact that currently we are bullish in TSLA, so possibilities of seeing $400 sooner than later is likely, until proven otherwise.
Could we break out or do we double top/ stay range bound?
That would be the place to re-assess the situation.
One major factor in my opinion to help us determine what might happen is VOLUME.
I think for us to really solidfy this idea of making New ALL TIME HIGHS, volume has to continue to increase and really spike when we reach the $400, RANGE TOP.
We don't want to see volume below the PURPLE LINE DRAWN, but rather have it follow the GREEN arrow. Showing consistent growth and high volume.
Also another thing to watch is the RSI.
NOTICE the Black trend lines drawn.
When we broke out of our 2013-2019 Range, RSI broke past the Black trend line to continue into our HIGHS.
Come to current time, we are quite far off the Black Trendline drawn. This is something to watch.
Again, history does not have to repeat in current price action BUT it does provide data on what could potentially happen. As a trader it is important to always try to see different angles.
__________________________________________________________________________________
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on TSLA in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy
As a trader its empowering to overanalyze an asset you would like to trade.
To think of various potential associations or the direction that price action can have or go.
It reduces any surprises and allows for you to be ready and strategize adjustments.
And just NOTE: That this is just an idea/ theory and it does not have to play out as mentioned but i would urge us to atleast keep this idea in the back of our heads.
Things have been great this year, with many big names booming in price.
Many people calling for New ALL TIME HIGHS for many names.
This is also true for TESLA.
But what if we don't see all time highs in Tesla? What if in fact we are range bound, hitting the top of the range only to travel to the bottom of the range for a duration of time before we attempt new all time highs.
It sure is a possibility, as we have done so previously.
From July 2013 till the breakout in December 2019, we managed to stay in a RANGE.
(Roughly 2345 days or 6ish years).
This is not a bad thing per se. It helps the asset consolidate, create market structure and allows companies to stabilize, allowing them to fulfill the desires of investor sentiment, thus moving higher eventually.
If you can determine the levels of the range, it is also tradeable. More on that in future posts, as i will be monitoring TSLA like a hawk.
Now looking at our current RANGE. We've gone so far 1093 days. If history is any indication, we are about almost half way through our RANGE bound journey.
Note that if we are range bound, it doesnt have to mirror our previous data point.
Also that Investor SENTIMENT for TSLA is different now.
Also don't discount the fact that currently we are bullish in TSLA, so possibilities of seeing $400 sooner than later is likely, until proven otherwise.
Could we break out or do we double top/ stay range bound?
That would be the place to re-assess the situation.
One major factor in my opinion to help us determine what might happen is VOLUME.
I think for us to really solidfy this idea of making New ALL TIME HIGHS, volume has to continue to increase and really spike when we reach the $400, RANGE TOP.
We don't want to see volume below the PURPLE LINE DRAWN, but rather have it follow the GREEN arrow. Showing consistent growth and high volume.
Also another thing to watch is the RSI.
NOTICE the Black trend lines drawn.
When we broke out of our 2013-2019 Range, RSI broke past the Black trend line to continue into our HIGHS.
Come to current time, we are quite far off the Black Trendline drawn. This is something to watch.
Again, history does not have to repeat in current price action BUT it does provide data on what could potentially happen. As a trader it is important to always try to see different angles.
__________________________________________________________________________________
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on TSLA in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy
Note
Heres a Quick Update to my Range bound Theory for TSLA on the 1 Month (Macro) timeframe.
I am in the camp that we hit the Upper Border/ Resistance line of the Range bound pattern or Rectangle Pattern 1st due to some Short timeframe BUllish Developments. (See my other TSLA idea "Dont bet against Tesla..." shorter frametime analysis)
After which i believe we will be rejected to retest the 21 EMA, maybe retracing some FIB levels. This will also coincide with indicators cooling off from a Overbought terroritory.
Reason for the Rejection, $400 level is a strong resistance zone and we will see Sell pressure from profit taking.
Notice for the Months of August and September, we have managed to maintain SUPPORT on the 21 EMA.
This is HUGE, especially for larger timeframes.
Our current October Candle, has bounced from 21 EMA, showing signs of Buy pressure increasing.
Volume currently is printing a Green bar.
BUT we need for a SPIKE of volume, where our current bar prints higher than previous month's bar.
This is important for us to reach the upper limit of the range.
Warning sign is that We've been printing lower highs, since January.
If we don't get spike, this could mean we are losing steam of this UPtrend.
MACD has crossed BULLISH. This is indicating the Bullish Momentum is being injected.
This makes me think we see $400, first before a drop.
BUT note we have crossed ABOVE the 0 level. Usually crosses ABOVE are weaker. And tend to cross Bearish more sooner than Crosses BELOW 0 level. Pay attention to this. This could tie in with potential rejection from $400.
STOCH RSI, is still in a BULLISH cross. Until we have a BEARISH Cross and it goes below the 80 level, we have more room to move UP. The cross and move below 80 level, indicates that Selling pressure has now begun.
For this to play out as mentioned, our Bullish signs must continue in the lower timeframes. Take a look at my shorter timeframe outlook that i update on a regular basis titled: "Don't bet Against Tesla while Bullish Strength Exists".
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