- Tesla fell during the trading session on Thursday, as we continue to see a lot of noisy behavior.
- Ultimately, this is a market that has been very strong for a while, but I also recognize that the market has been extraordinarily volatile and strong recently, but we may have gotten a little bit ahead of ourselves, as the $440 level offered a significant amount of resistance.
- All things being equal, this is a market that is still in a very strong bullish run, with perhaps a small gap underneath current trading offering a short-term floor in the market.
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Keep in mind that most people involved in the stock market these days do what is known as “passive investing”, buying ETF vehicles or mutual funds. These financial instruments all owned most of the same things, and Tesla is one of the bigger holdings. With this being the case, it makes a certain amount of sense that there is a little bit of a “permanent bid” for Tesla, and I think that it is only a matter of time before we bounced in order to go higher.
The gap that I was speaking of should offer support right around the $395 level, and I think that the closer we get to that area, the most likely outcome is that we get a bit of a bounce, and as soon as we get a bit of a bounce, then it’s likely that we could go higher and perhaps you would see the next leg of buying pressure jumping into the market. All things being equal, this is a market that I think continues to be bullish of the longer term, but we have gotten a little bit too far ahead of ourselves, and therefore a little bit of a pullback probably offers a bit of value the people will be looking to get involved in. Expect volatility, but I’m waiting to see some type of bounce to get involved again.
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