Sunday, October 12, 2014

TSLA Tesla Weekly Chart Overbot Rising Wedge Negative Divergence

Does this chart looks familiar? Where have you seen it before? Oh, yeah; it is the same as the FB chart posted this morning. If viewing this chart at a later date, type 'FB' in the search box at the right to bring up the Facebook chart. The same mo-mo and speculative players are chasing both FB and TSLA.

The nasty red rising wedge is in play (bearish pattern) and the collapses from rising wedges can be quite dramatic. Price is pausing at the 20-week MA support at 240. The negative divergence spank down occurs (red lines) aided by the rising wedge and overbot conditions. The smack down begins one month ago where price fell through the lower trend line of the rising wedge. Two weeks ago price came up for a back kiss of the lower trend line. Traders awaited the new product release which CEO Elon Musk alluded to in a cryptic tweet that only mentioned the "D" product to create a buzz. Folks became excited guessing the 'D' word which is "dual-motor all-wheel drive" and a new Model S design. The car is faster, big whoop; a golf cart on steroids. The wealthy, and especially the wealthy environmentalists, are the customers for TSLA vehicles and many of them have already purchased their local roundabout. Price is spanked down from the trend line in a successful back kiss for the bears. TSLA dumped -7.2% last week. Perhaps the 'D' word stands for disappointing, dumb, dead, desperate, doom, dreary and down, as in the direction the stock price drives.

Keystone dusts off the trumpet and plays 'Taps' in honor of Tesla's topping out and demise. Stick a fork in it, it's cooked. The prior top earlier this year was highlighted by Keystone back then and shorted at the time. Note that all the indicators in February-March were negatively diverged except for the histogram that wanted another price high after a spank down occurs. Price was smacked down to 180, then recovered for the higher high.

The red rising wedge, overbot conditoins and universal neggie d across all indicators (red lines) says that the funeral for Tesla is now underway and began one month ago. Price has no reason to every go back up to the highs again. The MACD lines have crossed to usher in negativity (red circle). Watch to see if the RSI goes sub 50% into bear territory. The stochastics are sub 50 in bear territory. Note the volume trailing off for the last year. Pumpers that are shills for Tesla, appear on television telling Uncle Paul and Aunt Flo to buy TSLA especially for the long term. At the same time these pumpers and dumpers are distributing their shares to the Paul and Flo sucka's. Every top needs a bag holding sucker. Uncle Paul and Aunt Flo placed their entire life savings into TSLA one month ago just as the pundits advised.

Projection is for sideways to sideways lower prices for the weeks and months to come and price may have placed a multi-month and multi-year top one month ago. The fall from grace may be quite dramatic if the rising wedge pattern kicks; price can be at 180 in no time making your head spin. Keystone does not currently hold a position in TSLA but obviously, as the analysis explains, the play would be on the short side. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 10/13/14: TSLA dumps another -5.2% today to 224.59 testing the 200-day MA at 220 so a bounce move may occur from here.

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