Tesla (TSLA) will be reporting its numbers after the close Wednesday night. This will be for the fiscal quarter ending December 2020. I have no idea what Wall Street is expecting, but in the current "crazy" mood of some corners of the market, I just want to focus on the price action. Let's check out a few charts.
In this weekly Japanese candlestick chart of TSLA, below, we can see a possible change in "character" -- from strong white candles to small red candles like spinning tops. Prices are a little more than twice the level of the rising 40-week moving average line -- one measure of being overbought or extended.
The OBV line is flat so far this month, which suggests that buyers and sellers of TSLA are more in balance than they have been in a while. The slow stochastic indicator (an overbought/oversold indicator) has become overbought and has turned lower. The Moving Average Convergence Divergence (MACD) oscillator has begun to narrow hinting that the strength of the uptrend is beginning to weaken.
In this daily Point and Figure chart of TSLA, below, we can see a potential upside price target in the $1,057 area and also that a trade at $811 or lower would weaken the picture.
Bottom line strategy: I don't know how long TSLA bulls have had the upper hand and bears have been paying the price. Tonight's report could be a sell the news event. No recommendation other than I would reduce your long exposure.
