Telsa Motors (TSLA) – Nice short setup

1 May

Tesla Motors has had a nice run on some good news. But now, the run looks overextended; at least in the short term. This looks like a great short setup for Tesla Motors (TSLA). On 4/23, the stock put out a doji candle with a long wick on top indicating a possible reversal. Volume was above average at 3.7m shares. The following day, the stock put out a red candle on average volume. TSLA stock had another distribution day on 4/26 on higher than average volume of 3.6m shares and finally today (4/30), it had bigger distribution day on high volume (5.5m) shares and another reversal candle.

The stochastic reading for TSLA stock has been in oversold territory since 4/18. It currently reads 83.89 and heading downward. Some support can be seen at the 8 day simple moving average ($51.45), at $46, and at $40.21. Below $40.21, I would look for a gap fill. See TSLA’s chart below:

Tesla Motors (TSLA) Short Setup

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