Tesla jumped above its 50-day line and March highs in above-average trade, a day after breaking its 10-week line. Like a number of highly regarded stocks trying to bounce back, Tesla stock is moving above a 50 day down line, which is not ideal. Still, this is the first TSLA buy signal for aggressive investors in months.
Video transcript[MUSIC PLAYING]
– But I want to take a look at Tesla, which you mentioned having a good day today, closing almost 9% here, above average volume. And we were talking about Tesla yesterday as our stock of the day – a very non-traditional stock of the day, with it below its 50-day downline. But that’s not the case anymore, at least for now, Ed, and I think it’s a pretty solid finish for the day.
– Yes. I mean, it basically ended with session highs, like pretty much everything. But yes, high volume. And you can look down. Obviously in hindsight it looks better now, but now you see a number of days. I mean, it wasn’t overwhelming moves, but there was just more build-up than sell along the way.
Yesterday was sort of a day of preparation. He went over his 10 week limit. But today it has passed above its 50 day line and those March highs. And so you can – yesterday was kind of a day of preparation in this regard, because it definitely signaled that something was going beyond those areas that, like, OK, now we’re now above some resistance.
Now, as Chris Gessel said on “IBD Live”, it is not ideal to have the downtrend – 50 day line to downslope. It’s just that you’d rather see him do more. I mean, again we see this with a lot of growth stocks because they were down so hard for 50 days, right? It’s not, like, unique to Tesla. Therefore–
– Which makes it a higher risk of entry point.
– It’s a higher risk. But, again, like, clearly, he went above the resistance levels. I mean, so this is an area where this is the first time, basically, since it’s reversed, you could – like there’s really a strong buy signal.
Now, I think it would be great if it could go all the way up to 800 or somewhere in there, higher, then form a handle and then, like, really set up. But Tesla tended not to do this. It tends to move quite low in the base and then soar so we’ll just have to see. In addition, there are profits to come, so this is something investors should be aware of. It could go either way, but definitely something that could move this stock.
– Very good. Well, if investors took advantage of the entry point, whether it was yesterday or early today, make sure now, I guess, that you don’t let all of those gains fade away.