Trading Tesla (TSLA)
Tesla (TSLA) is very hard to trade as news can completely disrupt the current short-term trend. We recently highlighted high volume areas on the daily chart that revealed some concepts on how to play this stock. Rather than looking for breakouts, play the panic selling on support and fade the euphoric buying near a key resistance area. Repeatedly on this chart you see that bottoms have been defined by the high volume areas highlighted in gray. Most recently TSLA moved out from the woodshed in early Spring with a massive $100+ rally. Just past the gray shaded volume area you see the highest volume green buying volume bar on the chart with a fairly low close on the corresponding price bar above. This is a clue to tighten stops. The stocks appears to rally nonetheless with a possible breakout above the $360 area high. The second to last bar is from Thursday. Look at the poor finish of the close (notch on the right) and the fact that the stock engulfs the prior day. So you have a bad bar on Tuesday, bar inside Tuesday's price action on Wednesday, and then a bearish engulfing bar on Thursday. Time to exit on that close and wait for the next panic selling period to accumulate again. If one waited for Friday, it was too late.