Not confirmed yet but if the market stays down it appears after 45 days of rally, the market may begin to take a tumble today. And if today’s downside trigger follows through, there could be a full-blown correction in the making.
A couple of ifs in there but if they hold, it will be time to look around for stocks to sell if one currently holds them, or to short if one is an aggressive trader.
Case in point – TSLA.
TSLA, like to most stocks, tends to run with the market’s general direction, both up and down.
On the up, Tesla has had a great in run during this rally, roughly from 191 to (at the moment) 227, or 18.5% or so. A profit well worth locking in since the stock can be volatile.
Now for the down. Looking at the chart below, it appears the market may be turning negative (the green and red dots the middle of the chart) and so is Tesla’s stock. When the market and the stock are in sync like this one needs to go with the market until the stock says otherwise.
In short, TSLA is a short. That is if all the ifs above remain true at the end of this day.
Market breadth did not stay negative on yesterday’s close (note the green dot instead of red on the indicator in the middle of the second chart below) so the short signal anticipated here never triggered and instead TSLA, on news (its charging station pricing) and modestly bullish day in the Nasdaq to back it up, had a nice rise today, 3.3% from today’s open. So it goes sometimes.
(right click on the chart for a larger view)
(right click on UPDATED chart for a larger view)