From a technical perspective, Tesla (TSLA) stock is approaching a convergence of resistance.
If the overall market recovers, Tesla could break resistance and support could form, which could allow price to continue to rally.
If this convergence of resistance holds, however, the downside would remain in play.
I’m looking at resistance between $875-$850. If this holds, my first downside target would be considered around the $700 area, followed by the $575 area.
To the downside, I’d consider playing this with a three-month expiration put option.
If price were to push through and break resistance, resistance would then be considered support.
At that point I’d be looking for a rally towards the $1,100 area. To the upside, I’d consider a six-month expiration call option.
Slow & Steady
Broader major market volatility has hurt nearly everything, especially the mega-cap stocks that weigh heaviest on the indexes.
There are numerous reasons for the volatility, including interest rate hikes, commodity prices, inflation, excess printing and distribution of money, a global energy crisis and, of course, Russia invading Ukraine.
The list just goes on and on, and with that so does the volatility.
What do we do in times like these? We get ULTRA CONSERVATIVE with our trades.
We preserve our cash. We trade cautiously and live to trade another day.
If this market is eating away at you, step aside and take a breather. Reduce your exposure. Trade options rather than underlying assets to reduce capital at risk.
Slow and steady.
Like all cycles, we’ll get through this one too! All of us here at Traders Agency are along this journey right by your side. We’re experiencing the same conditions you are.
And just because we’ve been doing this for decades doesn’t mean we’re exempt from the discomfort that comes with it. So, stay calm, and stay true to your trade plan.
Rules to Live By
“Nothing is impossible, the word itself says ‘I’m possible’!”
― Audrey Hepburn
Until next time, I wish you a beautiful and blessed day!
Yours In Trading Success,
Anthony Speciale Jr.