The “champagne cork” rally could be over for Tesla stocks (TSLA)…
Since its incredible rally from April, Tesla had risen by 390% to its peak in September of this year.
But could the bubble be about to burst on TSLA? It all depends whether we can break some key price structures on TSLA. Currently it has already closed below its 50 daily moving average, a level of support which puts the edge towards the bears.
We are also seeing a bearish head and shoulders pattern develop. If Tesla is going to be able to maintain this rally, it needs to protect $158.50 – the lows that formed in September and October.
However, one could argue that a retracement to this rally was overdue. A 38.2% fibonacci retracement level could take TSLA to $133.38 and a 50% retrace could take it to $114.59 (see chart below):
Do you agree with this assessment? Leave us your comments below.