Tesla Keeps Dipping, But So What? Here's Why The Dip Might Be A Great Opportunity

Tesla Inc. TSLA shares traded lower again Tuesday, likely seeing a pullback from the recent push in price.

Shares may also be moving lower after the results of a poll CEO Elon Musk put on Twitter came out, asking the community whether or not he should sell off 10% of his stock.

Tesla closed down 11.99% at $1,023.50.

See Related: What's Going On With Tesla Shares

Tesla Daily Chart Analysis

• The stock broke away from the pennant a couple of months ago and surged higher. It's now pulling back for the first time since almost doubling after the pennant break.
• Shares may find support near the trendline that once held as pattern support at some point in the future. A new resistance level may have formed near the $1,250 level as the stock could climb above the level.
• The stock trades above both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock is in a period of bullish sentiment.
• Each of these moving averages may hold as a potential area of support in the future.
• The Relative Strength Index (RSI) had a major pullback alongside the price and dipped all the way back to 53 on the indicator. This shows the selling pressure in the stock is now almost equal to the buying pressure, a first since mid-September.

What’s Next For Tesla?

Bulls shouldn’t be too upset to see the stock pulling back as the stock was moving in an almost parabolic direction. Any stock that ends up going parabolic will eventually see some sort of large pullback. This should give bulls some hope to see some sort of bounce in the future and have a great buying opportunity to get more shares at a cheaper price.

Bears are also happy to see the stock price start to dip, but they're hoping to see the stock be unable to bounce in time and for the price to continue to dip lower. Bears would like to see the stock fall back to the higher low trendline and eventually break below it and the moving averages. This could indicate the stock is seeing a possible change in trends and sentiment.