There are a lot of opinions about Tesla’s offer to acquire SolarCity. There are potential conflicts of interest, and both companies are bleeding cash etc. Institutional Fund managers and retail investors alike are raising red flags about Tesla stock on the news.
In fact, there are so many concerns about the company that the general consensus is: ‘Who would want to invest in Tesla stock now?’.
There are a couple of pieces of good news for investors, though. All you have to do is tune out the noise.
First, we don’t have to sort the deal out. The market will do that for us via price.
Second, the market is offering a discount to Tesla shares AND creating a strong negative sentiment against the stock that is often seen at or near key long-term bottoms.
Tesla Stock Chart – $TSLA
Make no mistake, Tesla is in a secular uptrend (as seen via a rising 200 week moving average), although shares have traded sideways for two plus years.
We have many TSLA price levels to watch as shares pull back:
- First, the low 180s have been a price level where investors have stepped in time and again.
- Also note the 200 week moving average that’s currently at 175.
- If those levels fail, the rising lower weekly bollinger band at 165 will come into play.
Together, these levels create a pretty strong longer term support zone.
If shares somehow broke through all of those levels then we have a much different discussion on our hands. Until then, we have a lot of technical levels to work with and interested investors should keep an eye on shares.
Thanks for reading. Trade ‘em well!
Twitter: @ATMcharts
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
