TSLA Technical Analysis: Gamma Exposure for Levels, Price Action1. Key Levels Identified:
* Highest Positive NETGEX (Call Resistance): $400
* Represents a strong resistance level due to the accumulation of call options. If TSLA approaches this level, market maker hedging could slow upward momentum or cause consolidation.
* Second Call Wall: $420
* Indicates additional resistance and a potential target for bullish momentum if $400 is breached.
* HVL (Hedging Volatility Level): $347.50
* A critical support area where market makers adjust hedging to neutralize exposure. Price movements near this level could lead to temporary stabilization.
* PUT Walls:
* 3rd PUT Wall: $340 (-1.37% Gamma Exposure)
* A moderate support level with notable hedging activity.
* 2nd PUT Wall: $330
* Stronger support, likely to hold unless broader market sentiment turns bearish.
2. Price Action:
* TSLA is trading around $403, testing the resistance at the $400 level. A break above $400 could push the price towards $420, while a rejection might result in a retracement towards $390 or lower.
Technical Indicators Analysis:
1. MACD:
* The MACD line is showing bullish momentum, with the histogram suggesting potential upside. However, watch for any divergence near resistance levels.
2. Stochastic RSI:
* Currently overbought, signaling potential short-term exhaustion. A downward crossover could indicate a pullback.
3. Trendlines:
* An ascending trendline supports the bullish structure, intersecting near $390. A breakdown below this trendline would invalidate the bullish momentum.
Options Strategy Plan:
1. Bullish Scenario:
* If TSLA sustains above $400:
* Call Option Entry: Strike price at $410 or $420, expiration within 1-2 weeks.
* Target: $420.
* Stop-Loss: $395.
2. Bearish Scenario:
* If TSLA rejects $400 and drops below $390:
* Put Option Entry: Strike price at $380 or $370, expiration within 1-2 weeks.
* Target: $370 (next major support zone).
* Stop-Loss: $395.
3. Neutral Strategy:
* If TSLA consolidates between $390 and $400:
* Iron Condor Strategy:
* Sell a call at $410 and a put at $380.
* Buy a call at $420 and a put at $370 to limit risk.
Recommendation for Expiration Date:
* Short-Term Expiry (1-2 weeks): Best for directional trades based on breakouts or rejections from key gamma levels.
* Longer Expiry (2-3 weeks): Ideal for capturing momentum plays or wider ranges.
Summary of Gamma Insights:
* The $400 level is pivotal for TSLA. A breakout above this level aligns with gamma positioning that supports upward momentum.
* Support levels around $390 and $347.50 provide clear areas for stop-loss placement or potential reversals.
* Traders can use gamma levels to anticipate volatility spikes and align their strategies accordingly.
Disclaimer:
This analysis is for educational purposes only and should not be considered financial advice. Always conduct your own research and risk management before executing trades.
