In today’s livestream, Jesse went over the $TSLA chart. Because $TSLA is down. A lot. 64% from the high. But does that make it a buy?

Today, a Barron’s analyst downgraded $TSLA from Buy to Hold, citing delays in the launch for Tesla’s lower-priced Model 2. Only 35% of analysts now have a Buy rating, and the average price target is $190.

Are they right?

Start with the Monthly Chart

For any new chart, we want to start with the monthly chart. This tells us at a very high timeframe where the company is heading.

We can see that $TSLA start printing a bearish divergence on the monthly chart as early as Jan 2021, which then broke down in November 2021.

You can see this bearish divergence with red line on RSI on the Sharp Shooter Indicator.

Then, $TSLA took its first leg down from Nov 2021 to Dec 2022, and price came back to the area where the bearish divergence started (pink dashed line). That means that bearish divergence played out.

Monthly RSI has room to the downside

We can also see that RSI on the monthly is below the 50 and trending down. This is bearish.

$TSLA’s monthly RSI shows more room for downside too. In the past, the RSI has gone below 38 before having a longer term reversal.

Weekly chart is likely closing lower

Similarly the weekly chart is bearish. Weekly RSI is at 33, and possibly putting in a lower low. Price is also likely putting in its lowest weekly close in almost a year.

Where is price heading?

So, how low will price go? We obviously don’t know for sure, which is why Jesse looks for higher probability of reversals.

Bull case

If you’re bullish on $TSLA, you’d want to see it:

1. rebound here fairly quickly

2. regain the May 2023 close on the weekly

3. break the RSI trendline

4. get back above the trending dots

The argument here is that $TSLA is:

1. closing the price gap

2. It’s in the golden pocket

3. the big boys are pushing it down ahead of earnings, and $TSLA will jump on earnings next Tuesday.

That can be a risky trade to take though because there’s no stop losses on earnings—price will just gap up or down. And with RSI this low, it becomes more likely that it gaps down.

But if you’re bullish $TSLA, you want it to be putting in a macro higher low sometime soon.

Bear case

If you’re bearish on $TSLA, you could use fibonocci retracement from the 2019 to 2021 move to mark out levels.

The first comes in at $106, which is inline with how low the first retracement went.

Then $70 is at the .5.

And if you want to get really bearish, the .786 is down at $25, along with the Mar 2020 lows. Most stocks came back to revisit their Mar 2020 lows, but $TSLA never did.

We’re not there yet though. We’ll just take it level by level.

Summary

In Jesse’s style of trading, he’s not looking to buy the bottom—he’s looking for high probability reversals. And $TSLA isn’t quite there yet.

You can watch his full livestream here:

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Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.