Let’s look at the charts and indicators.
In the daily bar chart of TSLA below, I can see that the share price declined below the 200-day moving average line in February. TSLA has taken a dip to retest the 50-day moving average line.
Trading volumes were very active in December and January as the prices rallied but volumes have subsided in February and so far in March. The on-balance-volume (OBV) line looks like it peaked in late February and shows some weakness in March that suggests a pivot from aggressive buying to aggressive selling.
The Moving Average Convergence Divergence (MACD) oscillator turned down in February and is no longer above the zero line.
In the TSLA weekly Japanese candlestick chart below, I can see that the share price failed to break below the falling 40-week moving average line.
Trading volume was more active over the last three months and tells me that some traders participated on the rebound. The weekly OBV line shows a two-month rise within a longer period of decline.
The MACD oscillator turned upside down for a covered 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 area is not a support zone so further downside is possible in my opinion.
Bottom Line Strategy: TSLA bounced back strongly from its late December/early January lows, but this rally appears to be coming to an end and therefore a deep pullback is possible in this weak market environment.
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