- Tesla looks relatively flat in premarket trading on Friday, after pulling back during the trading session on Thursday.
- This is important to recognize, due to the fact that the market fell to test the previous symmetrical triangle that the market had been in for some time.
- Tesla has seen a lot of volatility over the last year or so, but most of it is just nonsense.
Technical Analysis
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The technical analysis for this stock is relatively positive, considering that we just broke out of a symmetrical triangle, and we have the 50 Day EMA curling higher to try to meet current price. To the upside, the $360 level is an area that I think we will see resistance at, and if we can break above there it’s likely that we will see a lot of momentum jumping into the market.
What I do find interesting is that at the bottom of the symmetrical triangle we just left, we have the 200 Day EMA offering support, so all things being equal, I think we’ve got a situation where traders will look at this through the prism of everything pointing to the upside, but not necessarily for a rapid move, just a steady one, much like we have seen over the last 2 months.
Overall Sentiment
The overall sentiment for the stock market is fairly strong at the moment, due to the fact that everybody is expecting the Federal Reserve to cut interest rates at least once this year, and most traders expect the Federal Reserve to cut interest rates twice. This will help “highflying technology stocks”, such as Tesla. Tesla is held widely throughout a lot of passive investment vehicles, so I think at this point in time this is a market that still has a little bit of a “built in bid” going forward. I have no interest in shorting Tesla, at least not until the overall stock market itself looks softer.
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