Tesla Pulls Back Due To High Volatility In The General Market: What's Happening?

Tesla, Inc TSLA opened slightly lower with an inside bar pattern on Tuesday before popping up to break above Monday’s high-of-day, where the stock bumped into resistance.

The general market saw wild price action at the open due to a technical glitch at the New York Stock Exchange that halted 84 stocks, many of them to the downside. Although Tesla saw comparatively low volatility to many other companies, bearish pressure on the S&P 500 was causing Tesla to fall.

Tesla is set to print its fourth-quarter financial results on Wednesday, and traders and investors are concerned the EV-giant's revenue could suffer due to fourth-quarter deliveries that came in under Tesla’s forecast. Tesla has seen increased competition in the EV space, with multiple legacy automakers rolling out electric versions of their vehicles.

The beaten-down stock found a bottom at $101.81 on Jan. 6, when Tesla reversed course into an uptrend. Although a negative reaction to Tesla’s earnings print could negate the current trend, from a technical standpoint, the stock looks set to climb higher over the next few days and weeks.

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The Tesla Chart: Tesla’s most recent confirmed higher high within its uptrend was formed on Jan. 18 at $136.56 and the most recent confirmed higher low was printed at the $124.31 mark the day after. If Tesla continues to pull back on Wednesday, Tuesday’s high of day will serve as the next higher high within the pattern.

• If Tesla closes the trading day near to flat or at its low-of-day, the stock will print a bearish gravestone doji or shooting star candlestick, which could indicate lower prices are in the cards. If that happens, bullish traders want to see Tesla reverse to the upside above $125.
• If Tesla runs into buyers later on Tuesday and closes the trading day near its high-of-day price, the stock will print a bullish Marubozu candlestick, which could indicate higher prices are in the cards. If that happens, Tesla may find resistance at the 50-day simple moving average.
• Tesla has resistance above at $152.19 and $166.71 and support below at $139.53 and $123.80.

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