- Over the weekend, we have seen tensions between the United States and China ease a bit, and that has helped many stocks around New York recover, including Tesla. Tesla got eviscerated on Friday, dropping from $440 down to $414 rather quickly. This of course has a lot to do with the exposure of Tesla in China, and the idea that perhaps some of those rare earth minerals that were being debated could come to haunt Tesla as it needs many of them for the chips that the cars use.
However, at the moment it looks like we are seeing a nice bounce due to the noise over the weekend, and I think you continue to see traders come into this market to pick up the overall momentum to the upside. The $400 level continues to be important, and I think you have to look at this as a short-term “floor in the market.” If we were to break down below the $400 level, then the 50 Day EMA comes into the picture as a bit of support just below there.
Overall Uptrend
The overall uptrend is still very much intact, but it’s worth noting that when the market gets close to the $500 level, then you have a situation where we have a huge amount of resistance. If we can break above there, then I think the longer term uptrend will continue with Tesla, but keep in mind that the overall market is in an uptrend, and Tesla tends to be a big factor in that equation. Ultimately, this is a market that I think will eventually move to the upside mainly due to the fact that there are so many people who are invested in Tesla, the market will eventually have to drift higher. After all, if you have anything along the lines of passive investing in your retirement account, you almost certainly own Tesla. This has been the case for multiple years, and I don’t see that changing anytime soon. I am a buyer of short-term dips, as long as we can stay above the 50 Day EMA.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
