Tesla TSLA Revs Up with a Breakout – Level Planning
Tesla (TSLA) stock broke key resistance today, surging into open air for a possible breakout play.
However, shares first must break the key price resistance as noted in today’s post.
Let’s chart the breakout and see the current target – and breakout – levels for trading Tesla.
Here’s the Weekly Chart for perspective:
After spending the beginning of 2015 in a downtrend and under the 50 week EMA, Tesla shares reversed on a clear positive momentum divergence off $180.00 to break above $200 (back above the 50 week EMA0 into a new uptrend.
Note the divergence into support and the green highlighted breakout event that sent shares soaring.
The upside “Open Air” target was the $260.00 prior high where we find the stock at the moment.
Here’s the Daily Chart for a closer look:
We can see the Positive Momentum Divergence at the beginning of 2015 and the strong reversal that took price back above $200 toward the current $260.00 per share price target.
Note today’s breakout above the 61.8% Fibonacci Retracement – and the $250 level – as drawn.
In today’s session, price already moved up away from $250.00 toward the $260.00 target.
It’s at this point that we’ll plan future trades in Tesla.
Note the two yellow highlights – prior price highs from 2014 – and the “Open Air” pocket above $265.
Should buyers continue revving price higher, look for a retest of the $290 or even $300 per share targets.
Otherwise, look to be neutral between the $250 and $260 current zone.
Tesla would be a Bull Trap breakdown bearish candidate on a return under $250 from here.
Note these levels and trade accordingly!
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Corey Rosenbloom, CMT
Afraid to Trade.com
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
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