Is Tesla Trying for a Triangle Breakout?
Tesla soared in August and consolidated in September. Now it may be poised for a breakout.
As we highlighted on September 25, TSLA was forming a triangle with potential for a move toward $440. That panned out last week and the stock has gone nowhere since.
But Elon Musk’s electric car maker could be doing some important work along the way.
First, TSLA is trying to break the downward trendline marking the top of its triangle. It’s been holding its ground above that line for the last week. Is old resistance becoming new support?
Second, TSLA has managed to stabilize above its 21-day exponential moving average (EMA). At other times lately, it knifed below that line.
Third, that calmer range of movement has squeezed its Bollinger Band Width to the narrowest in over a month.
The backdrop may remain positive for TSLA in other ways. Politically, EVs are favored going into the election. (Other big techs could face modest antitrust risk following Tuesday's Congressional report.) Fundamentally, TSLA’s business remains in a strong spot with exposure to Chinese growth and signs of deliveries still surprising to the upside.
Traders may want to watch the current tight range and potential triangle breakout. Could TSLA melt higher into its next quarterly results above two weeks from now? (The official release date hasn’t been announced yet.)
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
As we highlighted on September 25, TSLA was forming a triangle with potential for a move toward $440. That panned out last week and the stock has gone nowhere since.
But Elon Musk’s electric car maker could be doing some important work along the way.
First, TSLA is trying to break the downward trendline marking the top of its triangle. It’s been holding its ground above that line for the last week. Is old resistance becoming new support?
Second, TSLA has managed to stabilize above its 21-day exponential moving average (EMA). At other times lately, it knifed below that line.
Third, that calmer range of movement has squeezed its Bollinger Band Width to the narrowest in over a month.
The backdrop may remain positive for TSLA in other ways. Politically, EVs are favored going into the election. (Other big techs could face modest antitrust risk following Tuesday's Congressional report.) Fundamentally, TSLA’s business remains in a strong spot with exposure to Chinese growth and signs of deliveries still surprising to the upside.
Traders may want to watch the current tight range and potential triangle breakout. Could TSLA melt higher into its next quarterly results above two weeks from now? (The official release date hasn’t been announced yet.)
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.