On Monday, Tesla shares (NASDAQ: TSLA) suffered serious losses, falling by 9% during the American session. So bad day the manufacturer did not have electric vehicles since September.
In addition, from the beginning of 2021, the company's capitalization decreased by almost 19%. In his tween CEO of Euro Pacific Capital Peter Schiff, who is known for its skepticism in relation to cryptocurrency, called the reason for the offensive of the "bearish" phase of the recent one-and-and-anddraw investment TESLA in Bitcoin. We do not agree to its assessment for a number of reasons.
First, even if we proceed from a generally accepted scale of 20% used to determine the "bearish" market, the shares lost only 19%. Investors who remember the sharp sale of December 2018 (which did not reach a little up to 20%), should not be forgotten about the flourishing of the rally.
Moreover, a loss of 9% in one day is disproportionately buying Bitcoin by $ 1.5 billion. These investments are a drop in the sea compared to the TESLa market capitalization of 686 billion dollars (and this is taking into account yesterday's sales).
We can agree that tweet Shiff influenced the sentiment of investors, especially given the open support for digital currencies with Ilona Mask (the rhetoric of the billionaire stimulated the DOGELECOIN rally and, of course, Bitcoin). And although BTC is now trading at about 15% lower than its record maximum achieved this week, it is difficult to prove the correlation between TESLA shares and the drop in the digital currency.
Most likely, the Bitcoin drawdown is associated with the achievement of a key turn of 1 trillion market capitalization, which prompted some investors to fix profits. And the sale of Tesla fell on the same day when the entire technological sector suffered.
Is it anyone to be surprised that Tesla shares fell stronger than the rest of the sector? No, if you consider how long they were ahead of their "colleagues". Since the beginning of the year, Tesla added 26%, while S & P 500 scored 6.6% (according to the TECHNOLOGY SELECT SPDR® FUND Foundation (NYSE: XLK)). Thus, the fall by 9% on Monday is quite fair, given the XLK stage by 2.25%.
The fundamental picture suggests that investors simply fix profits after the rally of the technological sector running the coronavirus pandemic. Taking into account the above, it seems that Tesla (and Bitcoin, if it went to that) is simply in the correction mode on the background of an explicit upward trend (if you judge the weekly schedule).
Nevertheless, the last decline was so cool that it leaves the ground for another 30 percent collapse. But, although exactly so much separates the shares from the rising trend (taking the beginning on March minima), they do not necessarily fall so deeply.
On the daily chart the price struck the neck line of the skewed model H & S; The slope of the model shows that demand was suppressed by the proposal and could not form a symmetrical right shoulder.
And although it enhances the "bear" signal, traders received it only after part of the implied targets has already been passed. The neck of the symmetric figure would be near the bottom of the right shoulder, i.e. About 806 dollars, not 757.
Trading strategies for sale
Conservative traders should not open short positions, since the trend remains ascending.
Moderate traders will be sold after rollback to the neck line, which will confirm the integrity of the model.
Aggressive traders can open a short position now (provided that they realize and take risks, and also act in accordance with the reasonable trading plan).
An example of an aggressive position
- Login: $ 750;
- Stop Loss: $ 775;
- Risk: $ 25;
- Target: $ 650;
- Profit: $ 100;
- Risk ratio to profits: 1: 4.
Author's note: This is nothing more than an example of a position. Actual analysis is given in the text of the article. The definition of an example assumes that this is just one of the ways of trading in this particular situation. At the same time, the accuracy of the analysis is also not guaranteed. You need to set up a trading plan for yourself, given the temporary and budget constraints, as well as your own temperament. If you do not know how to do it, train on small positions until we develop this skill, which is crucial in trade.
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