Tesla Breaks Lower, But Lack of Sell-Off Sparks Uncertainty
27 August 2024
In today's stock of the day, let's turn our attention to Tesla. Since mid-July, Tesla has been in a downtrend with a series of choppy movements. Throughout this decline, we've seen three notable bullish corrections, each forming distinct patterns marked with black lines on the chart. The first correction formed a triangle, which broke to the downside with a bearish gap. The second correction took the shape of a rectangle, and again, we witnessed a bearish breakout. Now, Tesla is forming what appears to be a flag or wedge pattern, and yesterday, we saw another breakout to the downside.
This latest breakout technically opens a sell signal. However, it's worth noting that this move didn't lead to a significant sell-off, which could be concerning for bears and encouraging for bulls. The key here is to watch the price action closely today. If the price climbs back above the third black line, it would invalidate the bearish breakout and signal a potential buy. Conversely, if Tesla closes at new lows today, it would confirm the breakout and strengthen the sell signal.