Also tests $700
Adam harped on the sharp decline on Tesla's tumble here. The fall has moved even lower and in the process got oh so close to the $700 level.
The low has reached $704.11. Getting within $4.11 of that round number is pretty close. Moreover, the price successfully tested the 61.8% of the move up from last week's low at $703.42.
The fall from the high yesterday at $968.99 to the low today has now taken 27.4% off the price. Just 8 days ago the price was at $539.28 (and seemed high there).
However, when trading instruments like this, you throw out "value" and have to trade what the price action is saying.
Below is the hourly chart of Beyond Meat. Both it and Tesla went up from a base by about $80% (actually Beyond Meat rose 83% while Teslsa moved up about 80%). The correction in Beyond Meat came toward the 50% but ONLY 21.53% from the high. The fall in Tesla has taken more off the top (over 27%) and retraced 61.8%.
For Beyond Meat the price bounce off the corrective low nearly retraced all the declines, before turning back down again.
What will Tesla do from here?
No one really knows, but technically, traders may lean against the $700/61.8% as a trade. If it holds, target the 50% at $754.13, and if gets above that, look for more (like getting above $800). Who knows, maybe it goes all the way back up and tests the $968 just like Beyond Meat did. The price action will tell the story.
If it breaks below $700, get out and be prepared for a potential test of the rising 100 hour MA at $612.
The clues are in the price action and from the clues from the technicals. The rest is just a guess as no one really knows what the future brings or what the future fundamental value is for the company.
PS. Beyond Meat over the last 4 days was able to get back below the 100 hour MA, but the fall to the low on Monday did find support against a lower channel trend line. The stock now trades below the 100 hour MA at 115.93 and the topside trend line at around $118. On the downside, the 50% at 104.53 and the rising 200 hour MA at 100.6584 are lower support levels.
