Will Tesla Continue In This Trend Or Is A Gap Fill On The Horizon? The Bull, Bear Case

Tesla, Inc TSLA was trading flat in the premarket on Monday, in tandem with the S&P 500, which looked to be opening near Friday’s closing price.

The Federal Reserve is set to issue its decision on interest rates on Wednesday and heading into the event, the market may trade sideways. Read more here...

The sideways price action may be needed because the EV giant entered a downtrend on April 20, the day following its earnings print, where Tesla reported smaller-than-expected margins. The five-day sell-off brought the stock to a low of $152.37 on Thursday, where Tesla rebounded before seeing bullish momentum on Friday.

Tesla has dropped prices of its vehicles to increase demand, which led to lower margins, as the company continues to search for ways to compete with legacy-turning-EV automakers such as Ford and General Motors.

Tesla bull and Future Fund's Gary Black recently suggested a different pricing model for Tesla, to reduce the price of its Model 3 Performance and Model 3 Long Range vehicles further to increase sales of the models. Read more here...

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The Tesla Chart: Tesla printed a hanging man candlestick on Friday, suggesting lower prices could be in the cards for Monday. If that occurs, bullish traders want to see Tesla drop on lower-than-average volume and for the stock to hold above the most recent lower low of near $152.

If Tesla retraces on Monday to print a higher low, the downtrend may be over and Tesla could reverse course into an uptrend over the coming days. Bullish traders could watch to see if Tesla prints a bullsih reversal candlestick such as a doji or hammer candlestick above that area for a possible entry.
Bearish traders want to see big bearish volume come in and drop Tesla down under $152, which would set the downtrend back into motion and indicate Friday’s bullish price action was merely a bounce to print a lower high.
If Tesla pushes up through Friday’s high-of-day later on Monday or during the week ahead, the stock is likely to close a gap that exists between $169.70 and $177.65. If that happens, the stock may find resistance, at least temporarily, near the top of the empty range.
Tesla has resistance above at $166.71 and $177.59 and support below at $152.19 and $139.53.