How To Trade Tesla Motors Inc (NASDAQ:TSLA)?


Dallas, Texas 04/17/2014 (FINANCIALSTRENDS) –  Tesla Motors Inc (NASDAQ:TSLA) on the daily charts seems to have broken out of a triangle pattern and is now trading below the trend line support which was the lower end of the triangle pattern. The breakdown of such a pattern indicates much lower targets for the stock in the coming day/weeks.

Tesla Motors Inc (NASDAQ:TSLA) is currently trading below its 50 day moving average and we believe because of the pattern breakdown above we might see the stock trying to test its 200 day moving average which currently is at $169.80

The momentum indicators for Tesla Motors Inc (NASDAQ:TSLA) are showing weakness and have entered the negative zone which is a bearish indicator confirming our bearish stance above. Along with the momentum indicators the relative index for the stock is also in bearish territory and even though the stock bounced back yesterday isn’t showing any signs of inherent strength currently.

On the weekly charts even though the stock has been in a tremendous uptrend over the last one year becoming one of the best performing stocks on the NASDAQ, we are seeing a bearish divergence in the momentum indicators which makes us believe that the uptrend might have come to an end and we should be ready to witness lower levels on the stock in the coming weeks. The relative strength index too is showing signs of weakness and is currently in a bearish mode and confirms the momentum indicators’ bearish undertone.

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Traders on the street believe that Tesla Motors Inc (NASDAQ:TSLA) is no longer a momentum stock and has lost the faith of the traders in the last couple of months. From touching an all time high just two months ago to have lost all the gained momentum in the last one year the stock is no longer the streets’ favorite as it were all of 2013.