{"id":58396,"date":"2021-11-10T16:52:57","date_gmt":"2021-11-10T21:52:57","guid":{"rendered":"https:\/\/www.t3live.com\/blog\/?p=58396"},"modified":"2021-11-11T07:27:23","modified_gmt":"2021-11-11T12:27:23","slug":"scott-redler-tesla-trading-lessons","status":"publish","type":"post","link":"https:\/\/blog.t3live.com\/2021\/11\/10\/scott-redler-tesla-trading-lessons\/","title":{"rendered":"Trading Tesla: 7 Lessons from an Epic Bear Smash"},"content":{"rendered":"<p dir=\"ltr\">Every once in a while, a stock comes along that defines the times. In 2019-2020, that stock was electric carmaker <strong>Tesla<\/strong> (TSLA).<\/p>\n<p dir=\"ltr\">Tesla's stock price went from under $40 to nearly $200 in 8 months, and dominated the news headlines along the way. Tesla was getting more attention than just any stock out there, aside from maybe <strong>Apple<\/strong> (AAPL).<\/p>\n<p dir=\"ltr\">Some traders made fortunes. \u00a0Others had their hearts broken.<\/p>\n<p dir=\"ltr\">Two big things were happening:<\/p>\n<ul>\n<li dir=\"ltr\">Bears ignored powerfully bullish technical signals<\/li>\n<li dir=\"ltr\">Bulls pushed things beyond what seemed reasonable.<\/li>\n<\/ul>\n<p dir=\"ltr\">And by studying this one stretch of Tesla\u2019s price action, you can learn a lot about momentum, risk management, permabears, and the power of a cult of personality.<\/p>\n<p dir=\"ltr\">I\u2019ve distilled Tesla's big run into 7 \u00a0important lessons, which you\u2019ll start learning right now.<\/p>\n<p style=\"text-align: center; color: #2c2c2c !important; --tcb-applied-color: #2c2c2c !important;\">Scott Redler's Positions as of 11\/9\/2021 at 3:34 p.m. ET.<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" title=\"Screen Shot 2021-11-10 at 3.34.56 PM\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/Screen-Shot-2021-11-10-at-3.34.56-PM.png\" alt=\"\" width=\"279\" height=\"203\" data-id=\"58419\" data-init-width=\"578\" data-init-height=\"420\" data-width=\"279\" data-height=\"203\" \/><\/p>\n<h2 dir=\"ltr\"><strong>1. Understand That Some Stocks Are Just Plain Different<\/strong><\/h2>\n<p dir=\"ltr\">Some stocks have such a powerful story that investors will routinely ignore short-term bumps in the road.<\/p>\n<p dir=\"ltr\"><strong>Amazon<\/strong> (AMZN) is a great example. It\u2019s missed on earnings plenty of times and had its fair share of bad news, but people have believed in the long-term story so much that every dip gets bought. Very few companies command that type of respect, so Amazon is basically in its own category.<\/p>\n<p dir=\"ltr\">The long-term chart says it all:<\/p>\n<p><img decoding=\"async\" title=\"AMZN-10_Nov_2021_15_38\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/AMZN-10_Nov_2021_15_38.png\" alt=\"\" width=\"738\" height=\"453\" data-id=\"58422\" data-init-width=\"1693\" data-init-height=\"1040\" data-width=\"738\" data-height=\"453\" \/><\/p>\n<p dir=\"ltr\">Tesla is also just plain different from the crowd in that it routinely goes from \u201cleft for dead\u201d to \u201ccan\u2019t be stopped.\u201d<\/p>\n<p dir=\"ltr\">Call it\u2026 the Elon Musk factor. Not many CEOs can get away with smoking pot with Joe Rogan.<\/p>\n<p>And that\u2019s not the only trouble Tesla\u2019s survived: there was the infamous \u2018funding secured\u2019 tweet, which attracted the attention of the SEC:<\/p>\n<blockquote>\n<p dir=\"ltr\" lang=\"en\">Am considering taking Tesla private at $420. Funding secured.<\/p>\n<p>\u2014 Elon Musk (@elonmusk) <a href=\"https:\/\/twitter.com\/elonmusk\/status\/1026872652290379776?ref_src=twsrc%5Etfw\">August 7, 2018<\/a><\/p><\/blockquote>\n[tcb-script async=&#8221;&#8221; src=&#8221;https:\/\/platform.twitter.com\/widgets.js&#8221; charset=&#8221;utf-8&#8243;][\/tcb-script]\n<p dir=\"ltr\">What sets Tesla apart is its unique power to be forgiven for its misdeeds.<\/p>\n<p dir=\"ltr\">There are core believers that are ready to juice the stock up at any given moment.<\/p>\n<p dir=\"ltr\">These folks are 100% convinced in Tesla\u2019s ability to succeed in electric cars, solar power, energy storage, and whatever Elon Musk comes up with next.<\/p>\n<p dir=\"ltr\">And there are shorts that believe the company is just one step away from failure.<\/p>\n<p dir=\"ltr\">So Tesla is a cornered animal.<\/p>\n<p dir=\"ltr\">You can\u2019t turn your back on it.<\/p>\n<p dir=\"ltr\">Because every time Tesla seems like it\u2019s on the verge of disaster, or that the stock\u2019s just gone too far too fast, Elon Musk pulls a rabbit out of the hat.<\/p>\n<p dir=\"ltr\">And just when it seems like it\u2019s blue skies ahead, it stumbles.<\/p>\n<p dir=\"ltr\">Tesla is a truly unpredictable stock &#8212; especially for a large cap.<\/p>\n<p dir=\"ltr\">You never know what\u2019s coming next.<\/p>\n<h2 dir=\"ltr\"><strong>2. Price Action Rules<\/strong><\/h2>\n<p dir=\"ltr\">If you follow me on Twitter, you know that I follow <a style=\"outline: none;\" href=\"https:\/\/www.t3live.com\/blog\/scott-redler-free-ebook\/\">the 8 & 21 day moving averages<\/a> very, very closely.<\/p>\n<p dir=\"ltr\">They\u2019re my short-term momentum monitor. When stocks are trending above the 8 & 21 day exponential moving averages, I don\u2019t fight them.<\/p>\n<p dir=\"ltr\">The #1 reason traders lose on shorts is because they look at a chart and say \u201cthat\u2019s gone too far. It has to go down.\u201d But stocks like Tesla go too far all the time. It\u2019s in their very nature. If a stock goes from $20 to $40 in the blink of an eye, you can\u2019t count out $50. And if it gets to $50, you can\u2019t count out $60, etc.<\/p>\n<p dir=\"ltr\">Now, before you turn the page, look at the chart below.<\/p>\n<p dir=\"ltr\">It is naked aside from two moving averages. What do you see?\u00a0 I see a lot of opportunities.<\/p>\n<p><img decoding=\"async\" title=\"TSLA-10_Nov_2021_14_33\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/TSLA-10_Nov_2021_14_33.png\" alt=\"\" width=\"738\" height=\"592\" data-id=\"58401\" data-init-width=\"1235\" data-init-height=\"991\" data-width=\"738\" data-height=\"592\" \/><\/p>\n<p dir=\"ltr\">Let\u2019s break it down step by step.<\/p>\n<p dir=\"ltr\"><strong>A) The Earnings Gap Holds\u00a0<\/strong><\/p>\n<p dir=\"ltr\">On October 24, 2019, Tesla had a big pro earnings gap that woke it up. That was the moment we knew it was coming alive. And then it didn\u2019t fill a single penny of the gap. That\u2019s a sign of strength you can\u2019t ignore, and should have been a wakeup call for the shorts.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"Tesla Charts Trading Tips(1)\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/Tesla-Charts-Trading-Tips1.png\" alt=\"\" width=\"738\" height=\"592\" data-id=\"58409\" data-init-width=\"1235\" data-init-height=\"991\" data-width=\"738\" data-height=\"592\" \/><\/p>\n<p dir=\"ltr\"><strong>B) Cybertruck Consolidation<\/strong><\/p>\n<p dir=\"ltr\">In mid-Nov. to mid-December, Tesla had a healthy consolidation, with the 8 & 21 day refusing to break. As we\u2019ll discuss later in more detail, this was during the Cybertruck launch drama, which was a pivotal time for the stock.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"Tesla Charts Trading Tips(2)\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/Tesla-Charts-Trading-Tips2.png\" alt=\"\" width=\"738\" height=\"592\" data-id=\"58408\" data-init-width=\"1235\" data-init-height=\"991\" data-width=\"738\" data-height=\"592\" \/><\/p>\n<p dir=\"ltr\"><strong>C) Major Breakout Level<\/strong>You saw before how quick the short-term move was, but it\u2019s also helpful to view things on a longer time frame because when historic levels get broken, they attract a lot of traders\u2019 attention.And in this case, we're talking about the Major Breakout Level at $76, which was a prior high for the stock.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"Tesla Charts Trading Tips(3)\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/Tesla-Charts-Trading-Tips3.png\" alt=\"\" width=\"738\" height=\"592\" data-id=\"58407\" data-init-width=\"1235\" data-init-height=\"991\" data-width=\"738\" data-height=\"592\" \/><\/p>\n<p dir=\"ltr\">Turns out, what came next was even more explosive than I could have imagined!<\/p>\n<p dir=\"ltr\"><strong>D) Accelerating Above the 8 Day<\/strong><\/p>\n<p dir=\"ltr\">This was one of the most powerful moves I\u2019ve ever seen. It was straight out of 1999.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"Tesla Charts Trading Tips(4)\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/Tesla-Charts-Trading-Tips4.png\" alt=\"\" width=\"738\" height=\"592\" data-id=\"58406\" data-init-width=\"1235\" data-init-height=\"991\" data-width=\"738\" data-height=\"592\" \/><\/p>\n<p dir=\"ltr\">From December 5, 2019 to February 11, 2020, Tesla did not test the 21 day a single time.<\/p>\n<p dir=\"ltr\">There was a quick test of the 8 day on February 6, but it was quickly reclaimed.<\/p>\n<p dir=\"ltr\"><strong>E) The Parabolic Move<\/strong><\/p>\n<p dir=\"ltr\">Do we really need to explain this? Tesla went absolutely wild, hitting $193.80.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"Tesla Charts Trading Tips(5)\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/Tesla-Charts-Trading-Tips5.png\" alt=\"\" width=\"738\" height=\"592\" data-id=\"58405\" data-init-width=\"1235\" data-init-height=\"991\" data-width=\"738\" data-height=\"592\" \/><\/p>\n<p dir=\"ltr\">So what am I saying? Price action rules. Period!<\/p>\n<p dir=\"ltr\">This trend demanded respect! And speaking of respect&#8230;<\/p>\n<h2 dir=\"ltr\">3. Respect Stocks That Refuse to Die<\/h2>\n<p dir=\"ltr\">Let\u2019s talk about the Cybertruck, which Elon Musk unveiled on November 21, 2019:<\/p>\n<p dir=\"ltr\">Here are some headlines from the event:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"tesla-cybertruck-headlines\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/tesla-cybertruck-headlines.png\" alt=\"\" width=\"618\" height=\"579\" data-id=\"58410\" data-init-width=\"618\" data-init-height=\"579\" data-width=\"618\" data-height=\"579\" \/><\/p>\n<p dir=\"ltr\">But how did the chart react to the Cybertruck launch, which included Elon Musk accidentally breaking a window?<\/p>\n<p dir=\"ltr\">Let\u2019s move in for a closer look:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"Tesla Cybertruck Chart\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/Tesla-Cybertruck-Chart.png\" alt=\"\" width=\"738\" height=\"606\" data-id=\"58412\" data-init-width=\"1267\" data-init-height=\"1040\" data-width=\"738\" data-height=\"606\" \/><\/p>\n<p dir=\"ltr\">Tesla gapped down after the Cybertruck announcement.<\/p>\n<p dir=\"ltr\">And then, on November 26, Elon Musk tweeted that preorders hit 250,000, which basically nullified all of the criticism.<\/p>\n<p dir=\"ltr\">By refusing to break the 8 & 21 day, Tesla was telling you it wasn\u2019t going down without a fight.<\/p>\n<p dir=\"ltr\">And then when the Cybertruck announcement gap was filled with the 8 & 21 day being reclaimed, that was a sign sentiment was turning very positive.<\/p>\n<p dir=\"ltr\">The lesson: if a stock refuses to die, show it some respect.<\/p>\n<h2 dir=\"ltr\">4. Be Careful When Hot Stocks Extend From the 8 Day<\/h2>\n<p dir=\"ltr\">I did very well with Tesla from the long side, especially with the call options and call spreads I bought in November.<\/p>\n<p dir=\"ltr\">But I also sold call options to give me short exposure 4 separate times when it got super-extended from the 8 day. When a really hot stock gets far extended from the 8 day, it\u2019s susceptible to pullbacks.<\/p>\n<p dir=\"ltr\">The naked shorting of options is a very risky strategy, and I execute it rarely. \u00a0It's certainly not appropriate for most people.<\/p>\n<p dir=\"ltr\">Anyway&#8230; when a stock goes parabolic to the upside, I use the distance from the 8 day moving average to get an idea of when something\u2019s gone too far, too fast.<\/p>\n<p dir=\"ltr\">This is particularly tricky with Tesla because, as I told you before, going too far, too fast is just what Tesla does.<\/p>\n<p dir=\"ltr\">This is where experience pays. And at the risk of sounding a little salesy, it\u2019s where <a href=\"http:\/\/t3live.com\/power\" target=\"_blank\" rel=\"noopener\">my services<\/a> come into play.<\/p>\n<p dir=\"ltr\">Because I\u2019ve been through so many booms and busts, I\u2019ve become pretty good at judging when things are truly getting out of hand.<\/p>\n<p dir=\"ltr\">And I\u2019m always trying to translate that feel into usable information for traders.<\/p>\n<p dir=\"ltr\">Anyway\u2026 let\u2019s go to the chart.<\/p>\n<p dir=\"ltr\">You can see here that Tesla\u2019s pullbacks all started from an extension above the 8 day. This is fairly common with momentum stocks.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"TSLA-10_Nov_2021_15_16\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/TSLA-10_Nov_2021_15_16.png\" alt=\"\" width=\"740\" height=\"455\" data-id=\"58413\" data-init-width=\"1693\" data-init-height=\"1040\" data-width=\"740\" data-height=\"455\" \/><\/p>\n<p dir=\"ltr\">That last move was really something else. I was tempted to get short the day before that $193.80. high, but backed off.<\/p>\n<p dir=\"ltr\">It\u2019s a good thing, because Tesla gapped up $20+ and ran another $17+ before topping out.<\/p>\n<p dir=\"ltr\">I did my final Tesla short call trade after the peak. \u00a0When Tesla was around $176, I sold weekly $240, $260, and $280 calls for some pretty fat premiums.<\/p>\n<p dir=\"ltr\">I made money all four times I shorted Tesla calls when it extended, but I also lost a lot of sleep.<\/p>\n<p dir=\"ltr\">Know what you can handle!<\/p>\n<h2 dir=\"ltr\">5. Don\u2019t Change Your Life Because of One Big Trade<\/h2>\n<p dir=\"ltr\">In Q4 2019 through early 2020, I had one of the most profitable runs of my trading career.<\/p>\n<p dir=\"ltr\">And Tesla was one of my biggest moneymakers.<\/p>\n<p dir=\"ltr\">This brings me to another thing I\u2019ve learned after 20+ years of pro trading: the good times don\u2019t last forever.<\/p>\n<p dir=\"ltr\">If you made a lot of money trading Tesla or any other stock, don\u2019t go crazy.<\/p>\n<p dir=\"ltr\">The worst possible thing you could do is upgrade your lifestyle.<\/p>\n<p dir=\"ltr\">Because once your expenses go up, you\u2019re in big trouble the next time you hit a cold streak.<\/p>\n<p dir=\"ltr\">You\u2019ll be forcing trades and acting out of fear because you\u2019ll be so desperate just to pay your bills at the end of the month.<\/p>\n<p dir=\"ltr\">You just might dig a hole so big that you\u2019ll wash out altogether.<\/p>\n<p dir=\"ltr\">The smart thing to do is pay down debt or make long-term investments.<\/p>\n<p dir=\"ltr\">What am I doing with my Tesla money?<\/p>\n<p dir=\"ltr\">I\u2019m not going out and buying a Ferrari!<\/p>\n<p dir=\"ltr\">I\u2019m putting a new kitchen in my house.<\/p>\n<h2 dir=\"ltr\"><strong>6. Short Interest Can Create a Self-Fulfilling Squeeze<\/strong><\/h2>\n<p>Here\u2019s a chart of Tesla short interest from mid-June to mid-January:<strong>\u00a0<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" title=\"tesla-short-interest\" src=\"https:\/\/www.t3live.com\/blog\/wp-content\/uploads\/2021\/11\/tesla-short-interest.png\" alt=\"\" width=\"512\" height=\"422\" data-id=\"58415\" data-init-width=\"512\" data-init-height=\"422\" data-width=\"512\" data-height=\"422\" \/><\/p>\n<p dir=\"ltr\">As Tesla went up, short interest went down.<\/p>\n<p dir=\"ltr\">Shorts were covering their positions as Tesla was rising.<\/p>\n<p dir=\"ltr\">The thing is, short interest is not a secret &#8212; everybody knows about it.<\/p>\n<p dir=\"ltr\">And in this case, that knowledge turned into fuel for what now looks like an inevitable squeeze.<\/p>\n<p dir=\"ltr\">The bulls knew Tesla was a heavily shorted stock.<\/p>\n<p dir=\"ltr\">And they knew that a rising stock would force the shorts to cover.<\/p>\n<p dir=\"ltr\">It\u2019s a vicious: the bulls buy, which in turn forces the shorts to buy, which just attracts more momentum buyers, which forces even more shorts to buy.<\/p>\n<p dir=\"ltr\">And so on, and so on.<\/p>\n<p dir=\"ltr\">It\u2019s a self-fulfilling cycle.<\/p>\n<p dir=\"ltr\">High short interest is typically a sign of trouble. Because when there\u2019s smoke, there\u2019s often fire.<\/p>\n<p dir=\"ltr\">But when a stock is trending higher, high short interest can mean more fuel for the bulls.<\/p>\n<h2 dir=\"ltr\"><strong>7. There Will Be Other Teslas, and You Can Trade Them!<\/strong><\/h2>\n<p dir=\"ltr\">There will always be hot stocks to trade, though admittedly, they don\u2019t get much hotter than Tesla.<\/p>\n<p dir=\"ltr\">And everything I taught you in this article&#8211; about respecting the trend and letting price tell you what news matters &#8212; can be applied to other stocks.<\/p>\n<p dir=\"ltr\">So I trust you have some new ideas about how to handle other hot names like <strong>Nvidia<\/strong> (NVDA), <strong>Roblox<\/strong> (RBLX), and <strong>Salesforce.com<\/strong> (CRM).<\/p>\n<p dir=\"ltr\">Try not to judge them by what you think will happen.<\/p>\n<p dir=\"ltr\">Focus on what the market is telling you.<\/p>\n<p dir=\"ltr\">As you gain experience, you see that putting your ego aside and listening to price is what really makes you money.<\/p>\n<p dir=\"ltr\">Very smart people go bankrupt every day because they think they can predict the future.<\/p>\n<p dir=\"ltr\">I can\u2019t predict where Tesla is going.<\/p>\n<p dir=\"ltr\">But I know how I\u2019ll react based on how it behaves, and I hope that you have a better idea of how you\u2019ll react.<\/p>\n<p dir=\"ltr\">And of course, if you want my ideas, you can always join me at Power Plays. Click the button below to get started today:<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every once in a while, a stock comes along that defines the times. In 2019-2020, that stock was electric carmaker Tesla (TSLA). Tesla&#8217;s stock price went from under $40 to nearly $200 in 8 months, and dominated the news headlines along the way. Tesla was getting more attention than just any stock out there, aside from maybe Apple (AAPL). Some traders made fortunes. \u00a0Others had their hearts broken. Two big things were happening: Bears ignored powerfully bullish technical signals Bulls pushed things beyond what seemed reasonable. And by studying this one stretch of Tesla\u2019s price action, you can learn a lot about momentum, risk management, permabears, and the power of a cult of personality. I\u2019ve distilled Tesla&#8217;s big run into 7 \u00a0important lessons, which you\u2019ll start learning right now. Scott Redler&#8217;s Positions as of 11\/9\/2021 at 3:34 p.m. ET. 1. Understand That Some Stocks Are Just Plain Different Some stocks have such a powerful story that investors will routinely ignore short-term bumps in the road. Amazon (AMZN) is a great example. It\u2019s missed on earnings plenty of times and had its fair share of bad news, but people have believed in the long-term story so much that every dip gets bought. Very few companies command that type of respect, so Amazon is basically in its own category. The long-term chart says it all: Tesla is also just plain different from the crowd in that it routinely goes from \u201cleft for dead\u201d to \u201ccan\u2019t be stopped.\u201d Call it\u2026 the Elon Musk factor. Not many CEOs can get away with smoking pot with Joe Rogan. And that\u2019s not the only trouble Tesla\u2019s survived: there was the infamous \u2018funding secured\u2019 tweet, which attracted the attention of the SEC: Am considering taking Tesla private at $420. Funding secured. \u2014 Elon Musk (@elonmusk) August 7, 2018 [tcb-script async=&#8221;&#8221; src=&#8221;https:\/\/platform.twitter.com\/widgets.js&#8221; charset=&#8221;utf-8&#8243;][\/tcb-script] What sets Tesla apart is its unique power to be forgiven for its misdeeds. There are core believers that are ready to juice the stock up at any given moment. These folks are 100% convinced in Tesla\u2019s ability to succeed in electric cars, solar power, energy storage, and whatever Elon Musk comes up with next. And there are shorts that believe the company is just one step away from failure. So Tesla is a cornered animal. You can\u2019t turn your back on it. Because every time Tesla seems like it\u2019s on the verge of disaster, or that the stock\u2019s just gone too far too fast, Elon Musk pulls a rabbit out of the hat. And just when it seems like it\u2019s blue skies ahead, it stumbles. Tesla is a truly unpredictable stock &#8212; especially for a large cap. You never know what\u2019s coming next. 2. Price Action Rules If you follow me on Twitter, you know that I follow the 8 &#038; 21 day moving averages very, very closely. They\u2019re my short-term momentum monitor. When stocks are trending above the 8 &#038; 21 day exponential moving averages, I don\u2019t fight them. The #1 reason traders lose on shorts is because they look at a chart and say \u201cthat\u2019s gone too far. It has to go down.\u201d But stocks like Tesla go too far all the time. It\u2019s in their very nature. If a stock goes from $20 to $40 in the blink of an eye, you can\u2019t count out $50. And if it gets to $50, you can\u2019t count out $60, etc. Now, before you turn the page, look at the chart below. It is naked aside from two moving averages. What do you see?\u00a0 I see a lot of opportunities. Let\u2019s break it down step by step. A) The Earnings Gap Holds\u00a0 On October 24, 2019, Tesla had a big pro earnings gap that woke it up. That was the moment we knew it was coming alive. And then it didn\u2019t fill a single penny of the gap. That\u2019s a sign of strength you can\u2019t ignore, and should have been a wakeup call for the shorts. B) Cybertruck Consolidation In mid-Nov. to mid-December, Tesla had a healthy consolidation, with the 8 &#038; 21 day refusing to break. As we\u2019ll discuss later in more detail, this was during the Cybertruck launch drama, which was a pivotal time for the stock. C) Major Breakout LevelYou saw before how quick the short-term move was, but it\u2019s also helpful to view things on a longer time frame because when historic levels get broken, they attract a lot of traders\u2019 attention.And in this case, we&#8217;re talking about the Major Breakout Level at $76, which was a prior high for the stock. Turns out, what came next was even more explosive than I could have imagined! D) Accelerating Above the 8 Day This was one of the most powerful moves I\u2019ve ever seen. It was straight out of 1999. From December 5, 2019 to February 11, 2020, Tesla did not test the 21 day a single time. There was a quick test of the 8 day on February 6, but it was quickly reclaimed. E) The Parabolic Move Do we really need to explain this? Tesla went absolutely wild, hitting $193.80. So what am I saying? Price action rules. Period! This trend demanded respect! And speaking of respect&#8230; 3. Respect Stocks That Refuse to Die Let\u2019s talk about the Cybertruck, which Elon Musk unveiled on November 21, 2019: Here are some headlines from the event: But how did the chart react to the Cybertruck launch, which included Elon Musk accidentally breaking a window? Let\u2019s move in for a closer look: Tesla gapped down after the Cybertruck announcement. And then, on November 26, Elon Musk tweeted that preorders hit 250,000, which basically nullified all of the criticism. By refusing to break the 8 &#038; 21 day, Tesla was telling you it wasn\u2019t going down without a fight. And then when the Cybertruck announcement gap was filled with the 8 &#038; 21 day being reclaimed, that was a sign sentiment was turning very positive. The lesson: if a stock refuses to<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[737,1],"tags":[],"class_list":["post-58396","post","type-post","status-publish","format-standard","hentry","category-scott-redler-power-plays","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/58396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/comments?post=58396"}],"version-history":[{"count":21,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/58396\/revisions"}],"predecessor-version":[{"id":58433,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/posts\/58396\/revisions\/58433"}],"wp:attachment":[{"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/media?parent=58396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/categories?post=58396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.t3live.com\/wp-json\/wp\/v2\/tags?post=58396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}