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Tesla Motors Charting Outlook

Tesla’s shares staged a major advance over the first half of this year but since peaking in June, appear to have come under distribution with a major top forming. Over the last three months, the uptrend was broken, a head and shoulders top has been forming, while a growing negative RSI divergence has signalled upward momentum slowing.

Key points in the head and shoulders pattern have coincided with additional bearish technical signals. A double top coincided with the head of the pattern. The formation of the right shoulder in particular coincided with a number of other bearish indications including a failure to retake the extension of a broken uptrend line, a failure to retake the 50-day average (both showing support becoming resistance) and a failure of the RSI to regain 50, confirming a downturn in momentum.

Current resistance appears at the 50-day average near $340 with the shares trading near $325. Initial downside support may appear near $310, the rising neckline of the peaking patter, then the $300 round number and $285 a previous breakout point.

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Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.