Chart of the week: the incredible story of Tesla

TL;DR

Tesla's stock price has experienced a massive surge, reaching $1600 per share, but experts predict a crash due to the bubble territory it has entered.

Transcript

hello it's john burford with chart of the week for monday 13th of july and today i'm covering the amazing incredible story of tesla it is the most actively traded share mostly day trading and short term trading i think adds to the volume but um here's the weekly chart of tesla and for several years it hung around just under the uh forty dollar regi... Read More

Key Insights

• 🙈 Tesla's stock has seen a significant breakout and a subsequent crash during the coronavirus pandemic.
• 😺 The recent surge in Tesla's stock price resembles a "scolded cat bounce," indicating potential resistance ahead.
• 🥺 Other leading shares, like Amazon, have also seen vertical behavior, pointing to an impending market correction.
• 🚄 Sentiment in the market is extremely bullish, with a record high of 91% bulls on the daily sentiment index, suggesting a potential major top.

Questions & Answers

Q: What was Tesla's stock price range for several years before experiencing a significant breakout?

Tesla's stock price remained just under $40 for several years before it made a significant break above that level, indicating a buy signal.

Q: What is a "scolded cat bounce" in relation to Tesla's recent stock behavior?

A "scolded cat bounce" refers to a market coming back to test a significant resistance line, getting repelled, and rapidly moving up. Tesla's recent behavior resembles this pattern.

Q: What historical precedent suggests an impending crash for Tesla?

The RCA case in the 1920s serves as a historical precedent, implying that Tesla's stock is in a bubble territory and is likely to crash soon.

Q: How does the short interest in Tesla's stock correlate with its current price surge?

Hedge funds, previously bearish on Tesla, have had to cover their positions due to the surge, resulting in a decrease in short interest. This signifies that the bubble is set to burst.

Summary & Key Takeaways

• Tesla's weekly chart shows a significant breakout above $40, followed by a rally to nearly $100 before crashing during the coronavirus pandemic.

• The stock has recently experienced a rapid increase, reaching $1600, resembling a "scolded cat bounce" after testing a resistance line.

• While there may be more upside, the end of the road seems near for Tesla, as historical precedents suggest a crash is imminent.