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What’s Next for Tesla? Levels to Watch.

Written by

Knox Ridley

Technical Portfolio Manager

Published: March 4, 2021

Last Updated: March 4, 2021

With the NASDAQ100 down about 10%, the current bull market’s darling, Tesla, is down about 27%. Even after a 500% increase over the past year, we believe the current correction will provide a great opportunity to participate in this real trend, which we see accelerating in 2021.

The price data with Tesla suggests that a pullback to the $500-$495 region is on the table. This would provide the most ideal entry, and if we do see a drawdown to this level, expect heavy buying. We realize this would be a sizable drawdown; however, a correction to this level would confirm that our current long-term target of $1400 would be on track.

However, it’s worth pointing out that several momentum indicators/oscillators are currently at levels that have indicated significant market bottoms. For this reason, we may look to layer into a position in the $630s if we receive a series of buy signals.

Beth Kindig, founder and lead tech analyst of I/O Fund

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We would position Tesla as a momentum play that we would likely sell if we approach our upside targets. This is not the stock we would be comfortable holding once we enter a bigger selloff, so we will lean heavier on technical analysis to both manage risk, and take gains.

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Disclosure: Beth Kindig currently owns shares of TSLA. This is not financial advice. Please consult with your financial advisor in regards to any stocks you buy.

About the author

Knox Ridley

Knox Ridley

Profile

Knox Ridley is the Technical Portfolio Manager at I/O Fund, where he leads technical analysis and risk management. He started his career in 2007 as a licensed ETF consultant and has worked with hundreds of financial advisors and large institutions. Knox is trained in Fibonacci trading, Elliott Wave Theory, and Gann Cycles.

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