It’s been a shaky few days for Tesla (TSLA), and the chart is flashing some classic red flags that traders would be wise to pay attention to.
Tesla closed yesterday with a 1.09% decline, but that’s only part of the story. From its recent high just three days ago, the stock has dropped more than 9%, pulling back hard and filling the gap between May 23 and May 27. That’s often a sign that momentum is shifting—and not in the bulls’ favor.
The real action started on May 30, when Tesla triggered what many chart-watchers call a bear flag—a bearish continuation pattern that tends to precede deeper downside moves. If you’re new to trading, here’s the short version: after a strong drop, the stock consolidates in a rising channel or wedge, then breaks lower again. And that’s what looks to be unfolding now.
On the volume side, yesterday’s trading clocked in at 81.87 million shares, still under its 30-day average of nearly 110 million, but enough to confirm interest around these levels. The put/call ratio sits at 0.69, hinting that many traders are still positioning for upside—but contrarians might see that as misplaced optimism.
The key support zone is around $319, while the next major resistance sits near $368. If Tesla can’t reclaim and hold above the $340s in coming sessions, that $319 level could be tested sooner than many expect.
This comes just days after renewed headlines involving Elon Musk and substance allegations stirred uncertainty. (Catch up on that here:ForexLive coverage.)
What should traders do?
If you’re just starting out, this is a great learning moment:
Bear flags suggest continuation of the downtrend, not a bounce.
Gaps filling can often mean the easy upside is already gone.
And when price hits a support zone, don’t jump in without signs of reversal—wait for volume and a strong green candle first.
Reminder: Trading stocks like TSLA can be volatile. Use stop-losses, and don’t risk more than you can afford to lose. Always do your own research, this is not financial advice and may even include errors (find any? Comment below so we can fix that!). Visit ForexLive.com (evolving to investingLive.com later this year) for additional views.Trade or invest in Tesla stock at your own risk only.
This article was written by Itai Levitan at www.forexlive.com. Read More Details
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