It had dropped from 379 in early December 2018 to 177 in six months.
On the one year cycle in early December 2019, TSLA had carved out a WEEKLY Stein & Handle pattern—a bullish cousin to the Cup & Handle.
On the week of November 18, 2019, TSLA carved out a large range outside down reversal week.
However, downside follow-through was scant.
That said, the pullback put in the Handle to this big picture Stein & Handle pattern.
When TSLA cleared the 11/18 reversal week at 330 it exploded to 498 in 5 weeks.
That said, drilling down to the dailies shows that pattern that precipitated TSLA’s 0 to 60 rip.
A daily TSLA shows it carved out a Cup & Handle from July through October.
The tip off to a bullish resolution of the Cup & Handle came with a breakout on October 14, when TSLA reclaimed its 200 day m.a.
The Rule of 4 Breakout — a breakout over a 3 point trendline — is oftentimes a powerful indication that points the way higher.
TSLA is up 100% since Handle.
Momentum Cup & Handles are a good thing.
The 1st pullback from that breakout traced out the Handle to the daily Cup & Handle.
TSLA came out with a massive gap on October 24.
Notably, the first pullback from that liftoff tested the bottom rail of a trend channel, presenting a buying opportunity in league with a test/undercut of the 20 day moving average for a Holy Grail buy setup as well.
Now TSLA is flirting with an important round number — 500, which also ties to the top of a trend channel.
This is a logical place for a pullback—if one is on the table.
Notably this same region shows a shorter term rising trendline.
It was hard to buy the momentum coming out of the Cup & Handle.
It was hard to buy into the next leg up after a shallow pullback; however, it must be remembered that when there is big institutional buying with several funds fighting to get their position in a stock, that this is the most bullish thing you want to see.
These funds are not as price sensitive as you and I may be.
Moreover, these funds can be so big that they have to do their buying over many weeks.
Consequently, this can be the start of a very big move without any meaningful pullbacks to speak off.
This is what I call Golf.
Don’t look at a name with the above characteristics once it’s in gear… go play golf.
The takeway: price is not truth, persistency is truth.
