Tesla Trade Idea

Video analysis - https://bit.ly/3p7JZdF

Tesla, the poster child of volatility and momentum traders’ favourite is approaching a key price level on the charts. Angst around Ukraine and Russia conflict won’t do any favours for the high risk high reward share. Last night Putin decided to recognize Donetsk and Luhansk as independent republics, which has cranked up tensions further. Peacekeeping Russian troops are also being deployed in the Donbas region, where these two cities are located. Sanctions are being implemented by the UK, EU and US, but for now aren’t considered nuclear in terms of harshness. Risk sentiment so far seems to be holding up, however, this situation is very fluid and prone to gyrations as new headlines arrive.

(Source: Tradingview - Past performance is not indicative of future performance.)

Price is sitting right on its $850 support (just above the 200-day SMA). This level has been tested multiple times and is key for bulls. There is a mini descending flat-sided triangle which has formed on the charts (usually resolves to the downside). I’ve also shaded two dark blue circles which potentially indicates a double top pattern forming. In terms of levels to watch, on the upside $950 is a good area to monitor and is also where the gap (yellow circle) would be filled and some price resistance around there if we were to see a rally. The 50-day SMA is slightly above at $978. On the downside, if $850 breaks and the 200-day SMA gives way at $830 then the previous low at $792 will be key.