There are countless stock charts I could dissect to get the same point across. The high-flying, high-beta stocks which were recently the darlings of the market are all getting wrecked. Across the board it seems like every stock that’s rocketed higher has come crashing back down to Earth. You see this take place lightning fast in after-hours following earnings as well. How many reports have you seen a beat and raise with a stock that sells off? Dozens.
Another victim of valuations has been Tesla (TSLA). After popping up over $488 in mid-December, Tesla shares have been slashed by more than 30%. Following its last earnings report its done nothing but trend lower, losing its grip on the 50-day and getting worse by the day. It’s now testing the February swing low.
Moving Averages: Bartosiak starts by examining the stock's moving averages, such as the 50-day and 200-day moving averages. He points out the significance of crossovers and divergences between these averages, which can indicate potential trend changes.
Support and Resistance Levels: Bartosiak identifies key support and resistance levels on the chart. These levels act as barriers that the stock price must breach or hold above, providing traders with critical decision points.
Chart Patterns: He discusses chart patterns like head and shoulders, cup and handle, or flags, and their relevance in predicting future price movements. These patterns can offer valuable insights into potential bullish or bearish trends.
Volume Analysis: He emphasizes the importance of volume analysis in confirming price trends. An increase in trading volume during a breakout or breakdown can validate the significance of a price move.
Dave Bartosiak's technical analysis approach adds depth to our understanding Tesla’s stock chart. By paying attention to moving averages, support and resistance levels, chart patterns, technical indicators, and volume, he equips investors with a comprehensive toolkit for making well-informed decisions in the stock market. Remember, while technical analysis is a valuable tool, it's important to consider other factors like fundamental analysis and market sentiment before making investment choices.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
