The day after the recent top in Tesla we suggested the stock was still within the huge range we have seen over the past 1.5 years. We wrote:
As we outlined yesterday, Tesla has been stuck in a strong range for almost two years. Tweets or not the stock continues trading inside this range.
Ranges like the one we have seen Tesla develop are creating powerful psychological forces among investors. What usually starts happening too early is that many investors start believing the stock will break out of the range, only to see it reverse the move once again.
Here we are once again seeing Tesla move sharply lower after the big recent squeeze. We would still continue to respect the huge range irrespective of future tweets.
First support is at 300 and then the 280 level. Tesla is a non trending stock at the moment, and trying to push a break out has been costly so far, but one day it will break out for sure.
Term structure has once again inverted and short maturities are once again traded relatively rich as people scramble for short term protection. Orange is now and green how it looked 2 weeks ago.
Source: charts by Bloomberg