Shares of Tesla ( TSLA) are turning lower. The big question of the day is whether this is a garden variety pullback or could it become a retest of the December/January lows?
Let's look at the charts and indicators.
In the daily bar chart of TSLA, below, I can see that shares prices stopped short of the declining 200-day moving average line in February. TSLA has dipped to retest the rising 50-day moving average line.
Trading volume was very active in December and January as prices rallied but the volume has decreased in February and so far into March. The On-Balance-Volume (OBV) line looks like it made a peak in late February and shows some weakness in March suggesting a pivot from aggressive buying to aggressive selling.
The Moving Average Convergence Divergence (MACD) oscillator turned to the downside in February and is not far above the zero line now.
In the weekly Japanese candlestick chart of TSLA, below, I can see that share prices failed at the underside of the declining 40-week moving average line.
Trading volume was more active the past three months and tells me that some traders participated on the rebound. The weekly OBV line shows a two month rise within a longer-term decline.
The MACD oscillator crossed to the upside for a cover shorts buy signal but the oscillator is narrowing.
In this daily Point and Figure chart of TSLA, below, I can see a potential downside price target in the $165 area. The $165 zone is not a support zone so further declines are possible, in my opinion.
Bottom-line strategy: TSLA made a strong bounce off its late December/early January lows but that rally seems over and done so a deeper pullback is possible in this weak market environment.
