Tesla (TSLA) stock fell 12 percent this week - its second-worst weekly performance in a year. But it does manage to settle above the significant value area seen by traders. Even if the price falls, a relatively vague technical indication indicates that Tesla is maintaining its long-term bullish trend.
"For Tesla, the trend is more in terms of the area shaded on this cloud or chart," said Katie Stockton, founder and managing partner of Fairland Strategies, during the Yahoo Finance Plus on Wednesday. She is referring to a component of the Ichimoku Cloud Indicator, which is used below to help determine potential support and resistance in the weekly candlestick chart.
The Achimoko cloud consists of two rows, the period A known and the period B, which are then shaded. Most traders focus on two cloud lines, although the indicator has a total of six components that were developed by Gucci Hosoda in the 1960s through tireless, manual backtesting.
"It's not really a black box, it's made in a way that's derived from mid-price points. So it's a bit more complicated to build. But a better picture." The signal is picked up from its window and placed on the chart. And its value is drawn, but then we can use it as a way to understand support and resistance. "
Stockton noted that the cloud's top secretion is well above current prices, and we should not expect Tesla to fall like a rock. "We don't really see it as a magnet, except that as it moves forward, it grows over time, and it shows that Tesla maintains its long-term growth."
Based on the chart, by the beginning of July, the cloud would have risen to its current price, which could have provided less than 500 500 support to the bottom of the cloud at that time. If the price goes down from there, the cloud will be seen as a potential resistance.
In the short term, Tesla needs to respect its 40-week moving average (purple in the chart), which closely tracks the 200-day moving average. There is another close level that Stockton wants to see honored by closing prices above two consecutive business days.
"There's a Fibonacci retracement around the level of 583 that we really want to see on a permanently closed basis. So here we are in this waiting and mood, let's get it back. But in the end, we We expect to be able to do that. It's a cloud-based support and guidance that is a long-term trend for Tesla.
