Since dropping out of the green zone of the SIA S&P 100 Index Report back in January, Tesla Motors (TSLA) has twice attempted to return but failed at the boundary between the green zone and the Yellow Neutral Zone. The last relative strength rally attempt failed earlier this month and since then, TSLA has been weakening in the rankings. Yesterday it fell 3 positions to 33rd place.
A major breakdown appears to be underway in Tesla Motors (TSLA) shares. Over the last few weeks, a bearish Head and Shoulders Top (upper/red circle) has been completed this week with a neckline break. Even worse, the breakdown occurred on a bit of a spike in volumes, indicating a decisively bearish turn in investor sentiment. Breaks of $275.00 or the 50-day average near $266.00 would confirm the start of a new downleg.
Initial potential downside support appears near $250.00, a round number that coincides with the bottom of a previous gap and a previous breakout point, followed by $225.00 and $210.00. Initial rebound resistance appears in the $290-$300 area.
Over the course of the last nine months, Tesla Motors (TSLA) has staged several large swings in both directions. As time has progressed, it has become increasingly clear that a new downtrend of generally lower highs and lower lows has emerged. Earlier this month, a rally attempt faltered at another lower high near $314.40. Since then, the shares have turned back downward, with a bearish Double Bottom breakdown signaling the start of a new downleg.
Potential downside support tests appear near $252.85, $229.05 and $211.60, all based on previous column highs and lows, with a horizontal count suggesting a potential test of $220.00. Initial rebound resistance appears near $302.20 based on a 3-box reversal.
With a bullish SMAX score of 7, TSLA is still exhibiting strength against the asset classes, but its trend has been downward since peaking at 9 a month ago.
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