Time to 'fade' Tesla (TSLA) after huge move - BTIG
BTIG's technical analyst Jonathan Krinsky said it is "time to fade" Tesla's (NASDAQ: TSLA) stock after the huge move higher on positive sentiment related to the recent price cuts.
Krinsky highlights that the stock is on its 8th consecutive up day and has as more than doubled off its January 6th low. Further, he notes the 24-day rate-of-change (87%) is the largest since April 2020.
"While we certainly did not anticipate this type of move, at this point we think the rally has largely run its course," Krinsky commented.
"We think the 210-225 range represents a very strong area of resistance," he added. "This was the prior lows from February, May, and June 2022. There was a lot of volume traded at that level, which suggests there should be a lot of supply. The 38.2% replacement of the all-time high ($414) to this year's low ($102) is $220.79. The declining 200 DMA is $226."
The technical analyst also notes Tesla is 29% above its 20 DMA, the widest spread since Nov. '21, and only exceeded a few times in its history.
"Even if you are bullish on the name, these levels appear overextended," he concludes.
By StreetInsider.com Staff