NEW YORK (TheStreet) -- Good morning, traders!
1. First let's look at the market darling, Tesla, which designs, develops, manufactures and sells electric vehicles, as well as electric powertrain systems and components for other automotive manufacturers.
Tesla traded positive on Monday, closing up 2.7% to $216.61 per share.
- Monday's range: 208.53 - 217.69
- 52-week range: 55.12 - 265.00
- Monday's volume: 4,777,330
- 3-month average volume: 9,079,480
Telsa looks very good at this level, and today will be the deciding factor on whether it is time to buy. For the last five trading days, Tesla closed over the t-line (8 exponential moving average, or 8 EMA), and is in a very short term up trend. Now the moving averages are beginning to cross over one another. We had a t-line/20 SMA cross on Friday, and now we are having a 20 SMA/34 EMA cross today.
This is a sign of a reversal. However, it's not a buy yet.
Today, shares need to break above the recent resistance level of $218.64, thereby creating a higher high. I'd set a trigger at about $220, or for those of you who are a little more conservative, set your trigger on a close above the 50-day simple moving average at $222.42.
There are overhead resistance levels at about $230, $237.23, $244.50 and $252.70.
This stock is volatile. Everyone wants to trade it, buy it, watch it, talk about it. It is a cult stock. It has been in a much-needed downtrend since it reached its 52-week high of $265 back in February.
I see it turning around today. As soon as this thing does turn around, investors are going to be buying it up in droves. Enter above the 50-day SMA, and stay long until you see a sell signal or a close below the t-line.
Tesla reports earnings tomorrow after market close. Whatever the outcome of the earnings report, you can almost guarantee that there will be a big move after that report. Tesla always gaps after earnings.