Tesla Inc’s (NASDAQ: TSLA) has so far failed to make a significant return to an everyday high like some of its Nasdaq 100 counterparts. That may change: Tesla’s stock has set two bullish patterns below a resistance level.
The Tesla card: Tesla’s stock on Monday completed the right shoulder of a bullish reversal head-and-shoulders pattern, reaching $ 708.16 – exactly $ 10 below the next resistance level of $ 718.16.
The stock is trading above the exponential moving averages of eight and 21 days, and it appears that the eight-day EMA is on the verge of falling back above the 21-day EMA, which is bullish.
On Wednesday, Tesla completed its sixth daily candle in a bull flag pattern, with the first three candles in the pattern creating the pole and the last three candles creating the flag.
Since there is a retracement in a bull flag pattern, traders and investors may want to buy the dip at the bottom of the flag before Tesla’s shares respond to the pattern and make a bearish move higher.
Tesla’s stock could then temporarily stand under resistance at around $ 718 before jumping above it and heading upwards.
If Tesla’s share can trade above $ 718 above the resistance, it could move to fill the gap between $ 768.50 and $ 777.37.
Related Link: Why Tesla Shares Trade Lower Today
What is a bull flag? A bull flag consists of an upward pole, where the share price has moved rapidly upward with a flag formation at the top of the pole.
The flag formation is a descending channel where the share price slowly recedes and does not exceed 50% of the length of the pole. The flag formation is considered consolidation before the next leg is up.
TSLA Price Action: Tesla’s shares fell 3.09% to $ 670.26 before the end of Wednesday.
Related link: Why this BofA analyst says General Motors are the best EV stocks
Photo courtesy of Tesla.
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