Tesla Motors Inc: Look to Buy TSLA Stock Soon

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tsla stock - Tesla Motors Inc: Look to Buy TSLA Stock Soon

Source: Windell Oskay via Flickr (Modified)

Shares of Tesla Motors Inc (NASDAQ:TSLA) have exhibited some wild swings so far in 2016, and traders and active investors could make some real bank from these moves. While TSLA stock largely is chopping back and forth in a multiyear range, for the past two months, Tesla has been working from the upper end to the lower end.

Beat the Bell: Tesla Motors Inc (TSLA)Now, you should be watching Tesla stock like a hawk for bullish reversals to buy into.

On June 10, I offered a trade idea on TSLA stock from the short side, saying the stock had reached technical resistance and a “bearish reversal,” where the odds of a downside bet looked favorable. Well, on Wednesday and Thursday of this week, Tesla dropped well below my initial target (below the $210 area) on reports that Tesla is looking to acquire solar energy company SolarCity Corp (NASDAQ:SCTY).

Now that TSLA has reached this profit target, I am once again looking more closely at possible bullish trades in the name.

TSLA Stock Charts

From a trading sense, what has worked for TSLA stock this year is buying dips and selling rips. This is clearly illustrated on the below multiyear weekly chart.

Yes, the stock lashed out to the downside in January/February, but aside from that, it has largely traded between the high $200s on the upside and the high $100s on the downside.

So while I currently have no position in Tesla stock, I do want to take a closer look at the long side and watch for bullish reversals.

TSLA stock chart weekly
Click to Enlarge

Moving over to the daily chart, we see that as a result of the two-week selling spree, TSLA stock has not only reached the lower end of its multiyear range (as seen on the above chart), but it also has arrived at the 61.8% Fibonacci retracement line measured from the February lows up to the March highs.

TSLA stock chart daily
Click to Enlarge

To be clear, while the stock has now reached a technical confluence support area, what’s still missing is price confirmation of the start of a bounce.

In fact, with this morning’s global selloff in risk assets following the United Kingdom’s vote to leave the European Union, TSLA stock could come under further selling pressure.

I will be closely watching for any possible exhaustion selling and a bullish reversal. If and when this takes place, a next upside trade in Tesla could open up. Look for a first upside price target in the $220s.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/tsla-stock-tesla-motors-inc-dip/.

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