On Thursday evening, Benzinga asked its followers on Twitter what they’re buying at the open on Friday. From the replies Benzinga selected one ticker for technical analysis.
@fitghi15 (Fitsum) and @Sosa6Andi (Andi Sosa) and @JoseadanJAG (JAG) are thinking of buying Tesla, Inc TSLA.
Tesla, like another of big tech stocks, has regained ground recently to trade near the 200-day simple moving average (SMA). The 200-day SMA is considered a bellwether indicator on the daily time frame, where a stock trading below the 200-day is considered to be in a bear cycle and a stock trading above the level is in a bull market.
On Friday, Apple gapped up above the 200-day SMA, which may be an indicator that the market as a whole may be headed back into a bull cycle. The S&P 500 officially entered into a bear cycle on June 13, when the ETF fell over 20% off its all-time high but technical traders may have seen the bear cycle on the horizon because on April 12, when the S&P 500 fell under the 200-day SMA.
Tesla crossed under the indicator on April 26 and fell to a low of $620.57 on May 24. The EV-giant has since shot up almost 40% from the low and is trading just 5% below the 200-day SMA. Conservative traders may want to see Tesla trade above the level for more confidence going forward.
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The Tesla Chart: Tesla has been trading in a fairly consistent uptrend since June 16, with the most recent lower high formed on June 26 at $768.79 and the most recent confirmed higher high printed at the $842.36 mark on June 22. On Thursday and Friday, Tesla traded up above the high but could trade higher still before printing another temporary top.
- If Tesla closes Friday’s trading day near the high-of-day, the stock will print a bullish Marubozu candlestick, which could indicate higher prices will come again on Monday. If the stock closes the session with a long lower wick, it could indicate the next higher high has occurred and a pull back is in the cards for next week.
- On Tuesday, Tesla also broke up from a bull flag pattern on the daily chart. The measured move of the pattern is about 19%, which indicates Tesla could be headed for the $920 area. If Tesla is able to complete the measured move, the stock will regain the 200-day SMA as support and enter into a bull cycle.
- Tesla has resistance above at $877.95 and $900.40 and support below at $821 and $780.79.
Photo courtesy of Tesla.
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A Look At Tesla As The Stock Trucks Toward This Bull Cycle Indicator - Benzinga
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