Tesla Prints 2 Possible Patterns Ahead Of Pivotal Week: Which Way Will The Stock Head Next?

Tesla, Inc TSLA was sliding over 4% on Monday after rallying over 3% on Friday as part of a relief bounce.

The electrical vehicle manufacturer has plunged over 40% since Sept. 21 amid CEO Elon Musk’s on-and-off again Twitter acquisition, which eventually closed in late October.

"The Big Short" investor and Tesla bear Michael Burry was recently voted as being the investor with the best tweets, according to the results of an MLIV Pulse survey. In contrast, former retail favorite and Tesla bull Cathie Wood ranked lowest in the options, according to a report.

See Also: Elon Musk's Personal Actions Put Investors At Risk, Tesla Bull Re-Ups 2018 Letter

Consumers may be turning bearish on Tesla as well following Musk’s Twitter acquisition. The approval rating for the brand slipped from a positive score of 6.7% in May to a net negative score of 1.4% on Nov. 7, according to a report. The negative sentiment on Tesla’s vehicles comes on the heels of Musk using his new platform to express support for Republicans, alienating some Democratic consumers.

The Week Ahead

Traders and investors on social media widely see this week as pivotal for the markets, with consumer price index data set to be released on Tuesday, followed by the Federal Reserve’s decision on interest rates to come on Wednesday at 2 p.m.

Tesla, like the general market, may chop sideways into Tuesday, which could be followed by a big move in either direction as data is released. Heading into the event, Tesla has set up two potential patterns, one that is bullish and one that is bearish.

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The Tesla Chart: Tesla’s bullish pattern consists of a possible inverted head-and-shoulders formation that started to develop on Nov. 7. The left shoulder was created between that date and Nov. 15, the head was formed between Nov. 16 and Dec. 1 and the right shoulder forming over the days that followed.

• If the inverted head-and-shoulders is recognized and Tesla eventually breaks up through the descending neckline of the pattern, the measured move is about 20%, which indicates Tesla could surge up toward $238. If that occurs, Tesla will also confirm a new uptrend and regain the eight-day and 21-day exponential moving averages (EMAs) as support.
• The bearish chart pattern that’s developed is a possible bear flag pattern, with the pole created between Dec. 1 and Dec. 8 and the flag beginning to form on Friday. If Tesla continues to form a flag and eventually breaks down from the pattern, the measured move is about 14%, which suggests the stock could fall toward $154.
• If Tesla regains the eight-day EMA, the bear flag pattern will be negated but a downtrend could still be in the works. If Tesla closes Monday’s trading session under $170, it could indicate lower prices and a continuation of the flag will take place on Monday.
• Tesla has resistance above at $177.59 and $190.41 and support below at $166.71 and $152.19.