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Chart Analysis - Week Ahead 17 October 2022

Tesla chart

Check out the trading idea of the week below, by your friendly, neighbourhood market analyst!

Trading Idea of the Week

(NYSE:TSLA - Tesla Inc - BULLISH BIAS

  • Key levels on the chart - consider taking trades from key support/resistance zones.
  • After Tesla's stock split, the down-trending stock has continued to decline since peaking at the start of 2022.
  • A high-interest rate environment and an upcoming economic recession has been hampering the company's future cash flows which affects its present value, therefore affecting its stock price.
  • Being one of the most traded stocks, this presents opportunities for both short-term traders and long-term investors and opportunity to potentially short the stock in the near term, but look for potential buying opportunities in the long term, depending on your view.
  • This week, we also have Tesla's earnings Q3 report due which will highlight how the company fared in Q3 and what their forward guidance will be for Q4 and beyond, presenting any challenges and how the Tesla boss aims to navigate through this uncertain environment.

  • On a positive note, Tesla's sales in China have continued to increase significantly, despite China's current uncertain economic situation, hitting record levels in Shanghai after its factory upgrade (Reuters)

  • Given we're near a key support level on the daily chart, there's a possibility we may see some short covering to push the price back higher before continuing to sell back down. If earnings and more importantly forward guidance is poor, we could see a break of this key support zone around $200, where price can retest that decending trendline.


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