TSLA Tesla Weekly Chart; Oversold; Positive Divergence Developing

TSLA stock has crashed more than -52% this year sh*tting the bed. The Tesla and Twitter soap opera is ongoing the last few months with the lead actor Elon Musk the star of the spectacle. The media reporting on the saga has been off-base from the start. Musk is portrayed as a freedom-fighter for free speech but he was actually fighting to get out of the deal.

What is obvious from the start that no one would report on is that Musk simply wanted to divest from TSLA stock; he is the major stock holder with all that money tied up in one place. He sees the writing on the wall with China ready to screw Tesla now that they stole all the state of the art robot technology to build EV's, and the competition from other carmakers is coming on line.

Musk knows TSLA stock is going to head south going forward and he wanted to pull some of his dough out before he loses a huge chunk. He cannot simply sell the TSLA stock because shareholders would panic that he is ditching Tesla stock and that could create a collapse.

Thus, Elon got a little too smart for his britches and probably figured he could buy Twitter and everyone would understand that he would need to divest from some Tesla stock for the new venture. It would be a good way to slide out of a bunch of Tesla stock before it falls apart going forward.

The plan went awry when Musk's hubris got the best of him. It happens to most people that become wealthy; you start to think that you can do no wrong and become overconfident and he began boasting about buying Twitter. The offer was stupid at $54.20 a share; $44 billion. Twitter was likely worth one-eighth of that. Pure hubris creating stupidity.

Imagine Elon's surprise when the Twitter board said, sure, we'll take your offer. Musk did not want to back down from all his big-talk and probably thought his plan of divesting from Tesla stock could still work out. Jack Dorsey had his tie-dye tee shirt and sandals on ready to take the money and give Elon the keys to the Twittermobile. Jack probably figured it was nice of Elon to be willing to buy such problems.

As Musk looked like a jackass because of the poor deal, he lined himself up to be fleeced, he tried like heck to get out of the deal but no dice, you signed the letter of intent with the conditions as stated. So Musk launches Plan B going through with the deal, because he would have lost in court, and has assumed a bunch of debt for a company that does not generate a lot of income.

Musk probably still figured that his plan to get rid of TSLA stock may work out where TSLA price would stabilize and the Twitter project would work out in the long run. The jury is out on what will happen. Advertisers are skittish about the new Twitter and TSLA's stock is falling apart.

The latest Elon baby game is a poll where he asked if he should continue running Twitter and 58% said no so supposedly he will find a new person to run the joint. Anyone that voted in such nonsense is a fool. Musk likely already knows what his plan is and it is just a game. Once Twitter is on the straight and narrow, all it really needs is a good Operations Manager. Dorsey moved on from Twitter to focus on Square. The content moderation is a thorny issue but the day to day operations are likely on auto pilot and not a challenge for entrepreneurial types.

Another idea on the poll question is that Musk may have used that poll to sniff-out the robots. People, especially those against his ideas, may have launched robots to add votes to the poll and it may be a way to ferret out these bad actors.

So all that said, was Musk's original plan of getting out of TSLA stock and trying to diversify into TWTR stock (which is now private owned by Musk and not publicly listed), that has gone somewhat awry, worth all the ongoing drama? In other words, is Tesla stock going to go to Hell in a handbasket and Musk was at least right in trying to extricate himself out of some of the stock?

If you bring up the TSLA monthly chart it is ugly and it is not done. The chart indicators are all weak and bleak forecasting that the downtrend in the monthly time frame will continue for several more months.

The TSLA weekly chart is above and a different story. Tesla has collapsed into Hades since September. The matching and lower low in price is made today on the weekly basis and the RSI is flat, call it positively diverged, wanting to see a bounce. Ditto the histogram. The MACD and money flow are weak and bleak wanting further lows on the weekly basis. The stochastics are oversold agreeable to a bounce. This behavior hints at a firm bottom coming in 2 to 4 weeks that will then create a multi-week rally on the weekly basis.

If you bring up the daily chart, you can clearly see possie d in play so TSLA is going to bounce in the daily time frame over the coming days which agrees with the RSI and histogram above. If you want a quickie trade for a few days, TSLA long would be good. Do not marry the position, however, since the weekly chart wants price to come back down again.

Note the big cluster of prices in this 120-160 area from late 2020. This is formidable support and a logical place to try and find support and stabilization. Price has violated the lower standard deviation line so a move back to the middle band at 230, and dropping, is on the table for the weeks forward.

The ADX shows that the epic rise in Tesla stock was a strong trend higher until May 2021. Despite the big drop in TSLA for many months, the ADX remains below 30 indicating that the move lower in TSLA stock price is not yet a strong trend. This bolsters the case that TSLA is bottoming on the weekly basis but still 2 or 3 weeks away from starting the multi-week rally.

The Aroon is showing maximum negativity so it is a contrarian indicator bolstering the rally case going forward. All the bears are 100% in the bear camp expecting more downside and so are all the bulls at zero, or 28; none of the bulls expect TSLA to rally again on the weekly basis (so it will).

The expansion pattern is in play shown by the two red trend lines so TSLA may bottom around that 130-140 area into early January when the rally on the weekly basis should begin.

Summing up all that windbag commentary above, if you are a nimble trader, you can go long TSLA now but only for a quick buck. Let it run for a few days then get out since the weekly chart will want price to come back down. If you bring up the 2-hour chart, it is positively-diverged and ready to rock and roll higher NOW in the hourly time frame.

Another way to play TSLA is simply wait and watch the chart. Probably when January begins, you will see all the indicators possie d on the weekly chart above so you will know that the bottom is in on the weekly basis. That will be time for a TSLA long position to ride it higher for a few weeks but do not marry that position due to the bleak monthly chart. TSLA will likely be a massive short play say, starting from late January or February forward into spring and summer (multi-month downtrend resumes).

As first stated above, the TSLA monthly chart is a nightmare on Elm Street. Tesla would be lucky if it bottoms on the monthly basis next summer and the price it stops at may be way down there. Keystone is not trading TSLA right now but will likely buy long at the opening bell tomorrow morning and ride that trade a few days then ditch it. Then, in early January, as explained, will probably go in long again and hold it a few weeks. The chart will tell you what to do. 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 Friday Morning, 12/22/22: Elon Musk says he does not plan to sell anymore TSLA stock for 18 months to a couple years, he said definitely not in 2023. Musk has already reneged on his promises to not sell stock twice before so investors will view his attempt at creating a floor in the stock price with a hairy eyeball. TSLA is at 123.15.

Note Added Tuesday Evening, 12/27/22: The Shanghai plant is shutdown due to covid. The stock cannot handle the negative news that is pounded-on day after day. Tesla is cutting car prices and increasing incentives for buyers. Traders lost confidence in TSLA after Musk said he would not sell stock in 2023. He would have been better off to say nothing. The bottom falls out and TSLA crashes to 109. The weekly chart will set up for a multi-week rally again over the next couple weeks (watch for the possie d to develop) but obviously price will begin the relief rally from a much lower point. Twitter was Elon Musk's Waterloo.