Tesla Is Easy To Trade If You Follow The Daily And Weekly Charts

Tesla (TSLA) climbed its 200-day simple moving average between May 13, 2021 and August 19, 2021. After strength to its all-time intraday high set at $1,243.49 on November 4, 2021, the stock traded as low as $792.01 on January 28. From this low, Tesla rebounded to $943.70 on February 1, 2022. Between May 13, 2021 and January 28 the 200-day SMA rebounded from $582.56 to $814.35.

The daily chart shows the importance of the 200-day simple moving average. The weekly chart shows an uptrend that goes back to the week of March 20, 2020.

Tesla has an elevated p/e ratio at 191.17% and does not offer a dividend, according to Macrotrends.

The Daily Chart for Tesla

Tesla traded up along its 200-day simple moving average as it rose from $582.56 on May 13, 2021, to $647.31 on July 29. The stock had a false death cross on July 12, 2021, then a powerful golden cross on September 14. A golden cross occurs when the 50-day simple moving average rises above the 200-day simple moving average. This tracked shares of Tesla to it’s all-time intraday high of $1,243.49 set on November 4. The decline from the high to the January 28 low of $792.01 totaled 36%. The low was just below the 20-day SMA now at $818.16.

The two horizontal lines near the top of the chart are monthly and quarterly risky levels at $1,167.46 and $1,181.25, respectively. Booking profits on strength to $1,181.25 proved to be a great strategy.

Below the 200-day SMA are two horizontal lines, which are annual and semiannual value levels at $673.68 and $590.23, respectively.

The Weekly Chart for Tesla

The weekly chart for Tesla is negative with the stock below its five-week modified moving average at $964.85. It’s well above its 200-week simple moving average or reversion to the mean at $330.51. The 12x3x3 weekly slow stochastic reading is declining at 33.56.

Note that the uptrend that goes back to the week of March 20, 2020, failed to hold briefly during the week of January 28.

Trading Strategy: Buy Tesla on weakness to its annual and semiannual value levels at $673.68 and $590.23, respectively. Reduce holdings on strength to its monthly and quarterly risky levels at $1,167.46 and $1,181.25, respectively.