On July 27 I wrote Tesla Beat Earnings Expectations But Must Hold Key Levels. It did as the stock could have been bought at its 200-day SMA and its 50-day SMA at $645.07 and $631.89 on July 27. I said a close below the 50-day would be a warning. This did not happen.
Tesla bears warned that the stock had an elevated p/e ratio, which is now 369.66%. Obviosity this p/e is elevated, but this statistic is not shown on the stock’s daily and weekly charts.
Everyone must realize that trading and investing in Tesla is pure speculation. However, the daily and weekly charts show how to trade this volatility as many followers of Tesla trust the ability of its CEO Elon Musk to take the center stage. If you like his style buy this stock on weakness.
The Daily Chart for Tesla
Tesla has been trading up along its 200-day simple moving average as it rose from $582.56 on May 13 to $647.31 on July 29. The stock is consolidating a 40% bear market decline from its all-time intraday high of $900.40 set on January 25 to its 2021 low of $539.49 set on March 5.
This trading range is being consolidated. The 50-day and 200-day SMAs are converged at $647.08 and $653.84 as support with quarterly and monthly risky levels at $758.56 and $817.15. Its semiannual and annual value levels lag at $421.72 and $390.81.
The Weekly Chart for Tesla
The weekly chart for Tesla is positive with the stock above its five-week modified moving average at $667.37. It’s well above its 200-week simple moving average or reversion to the mean at $219.57. The 12x3x3 weekly slow stochastic reading is rising at 53.80.
Trading Strategy: Buy Tesla on weakness to its 50-day and 200-day SMAs at $647.08 and $653.84. Semiannual and annual value levels are $421.72 and $390.81. Reduce holdings on strength to its quarterly risky level at $758.56 and its monthly risky level at $817.15.