Call it a dead-cat bounce in a bear market that never ended or a second bear market in the same calendar year.
It’s down in five of the past six days and in 10 of the past 12 sessions. It’s also working on its fourth straight weekly decline.
What does that have to do with Tesla? For starters, it’s still the largest position in ARKK despite Cathie Wood selling some of the position earlier this year.
It’s also despite CEO Elon Musk continuing to sell Tesla stock.
That was more of an attention-grabbing headline last month, but Musk was back at it again, recently offloading more than $1 billion worth of Tesla equity.
Trading Tesla Stock
Yesterday I tweeted about the breakdown in Tesla stock, which was a weekly-down rotation below $1,062.
Bulls were able to repair the stock a bit, bouncing it back over this level and getting a close near $1,085.
That action was perfect for active traders with sell-rules in place.
With an open near $1,085, bulls had plenty of time to either stop out on a retest of last week’s low at $1,062 or on a break of Thursday’s low at $1,057.
After it barreled through those levels, Tesla stock had a very clear level on the chart at $1,000. Not only does that level have psychological significance, but the 10-week moving average also comes into play near it.
That should be good for a bounce, but with a tape like this, you just never know.
Just below this area is the 50-day moving average, adding another potential support layer to the mix.
If Tesla stock pushes below all of these marks, traders have to keep the $900 to $910 area in mind. That’s where the gap-fill level and prior all-time high sit.
On the upside, Tesla can rally from the current lows and/or the $1,000 zone, but it needs to get back above the 10-day and 21-day moving averages to have a sustained push higher.
Further, it really needs growth stocks to get out of the gutter.