Tesla (NASDAQ:TSLA) is a popular name among investors and traders. For day traders who focus on the large cap sector, Tesla can provide volatile moves despite having a $1T market cap. The current momentum of the market is not bullish. But this means there is more possible opportunities for short plays. However, we think Tesla can provide you great day trade opportunities for both long and short plays. Let’s take a look.

Tesla chart

Below are the daily and 4h chart for Tesla. Looking at the bigger picture first is always best to understand the momentum of the stock. We can also compare this with the overall momentum of the market we spoke about earlier. Bearish.

Both charts show recent lower highs and lower lows from November 22nd. There was a high at $1,200 and then a low down to $1,062. Then the price moved up to $1,172, but this is lower than the previous high of $1,200. The price then took a new low of $1,056 (blue horizontal line). The price moved up to nearly $1,100, before taking a strong move down towards the $1,000 mark (Fridays closing price).

So, what can we expect today? Much will depend on the actions of the S&P 500. The Tesla price will mainly follow that. However, there are some levels to watch where we think buyers and sellers will come in.

Firstly, let’s look at the buy areas. The price sits right at $1,000. Buyers should come in at this price. Many will have been waiting to get filled at this price and it hasn’t given them the opportunity since mid November. Longer term investors should create buying volume here as well as scalpers looking to make a quick buck off a small move up. Another area that could see buyers come in is $978.60. This is the last area of support until nearly $900.

Where are some selling levels to watch? These can be used either to exit short term long positions or enter the short side of the trade. The first level is $1,085-$1,095. The price moved quickly away from this on Friday. This supply zone could see the price reject back down once it is tested. Another level is the upper trend line that has been created over the past month (white line). The exact area that this may create resistance depends on when Teslas price reaches this high again. A very key area we will be watching is a break of the final support at $978.60. If this level doesn’t hold up, we think a short down to $900 would have a great risk/reward. A reclaim of $1,000 would be a sensible stop for this trade.

4h chart provided by TradingView
1d chart provided by TradingView

The below chart shows the 1h Tesla price movements. This better illustrates the supply zone mentioned above at $1,085-$1,095.

1h chart provided by TradingView

Overview

There is our quick summary of the recent levels for Tesla and some ideas for you to keep in mind over the next few days. Lot’s is in store as traders eagerly watch the market for signs of a recovery or more weakness.

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