Tesla Stock Attempts To Lift Market, Gets Shot Down Despite Bitcoin Rebound

Photo courtesy of Tesla

Tesla, Inc TSLA attempted to lead the broader market higher on Monday morning, popping up about 2.65% higher, but lost steam when the SPDR S&P 500 SPY was unable to break up over Friday’s high-of-day, making an inside bar on the broad sector ETF the most likely scenario.

Earlier today, Tesla filed a report with the U.S. Securities and Exchange Commission stating its Bitcoin BTC holdings at the end of 2021 stood at $1.99 billion, which revealed an impairment loss of $101 million.

Bitcoin suffered a rough end to the fourth quarter, ending the year down about 28.17% off its Nov. 10 all-time high of $69,000, but closing the Dec. 31 24-hour period up about 61% from where it opened on Jan. 1, 2021. Bitcoin has been staging a reversal lately, however, and was trading up almost 3% higher Monday, which could eventually help lift Tesla.

By midday on Monday, Tesla was sinking about 0.5% lower but on lower-than-average volume, which indicates the stock is still in a period of consolidation after a Jan. 28 and Jan. 31 rally brought Tesla 18.2% higher. 

The Tesla Chart: On Feb. 1, Tesla broke up from a falling channel in which the stock had been trading since Jan. 4, when it reached a high of just over $1,200. On Jan. 28, Tesla hit a bottom at the $792.01 mark and bounced up to print a hammer candlestick on the daily chart, which indicated the stock would trade higher and the downtrend may be over.

Tesla is now trading in a confirmed uptrend, with the most recent higher high printed on Monday, which was above the Feb. 1 high of $943.70. The most recent higher low falls at the $882 mark, and Tesla will need to stay above the level to avoid negating the trend.

On Monday, Tesla looked to be printing a shooting star candlestick on the daily chart, which indicates the high low could come on Tuesday. If it does, traders can then watch to see if Tesla shoots up to print another higher high later this week.

Tesla is trading above the eight-day exponential moving average (EMA) but below the 21-day, which indicates a period of indecision is in effect. If the stock is able to print a higher high this week, it will regain the 21-day as support, which could eventually cause the eight-day EMA to cross above the 21-day, which would give bullish traders more confidence going forward.

• Bulls want to see big bullish volume come in and cause the stock to print a higher high and regain the 21-day EMA as support. There is resistance above at $945 and the $978.60 mark.
• Bears want to see big bearish volume break Tesla down to print a lower low, which will negate the uptrend. There is support below at $900.40 and $877.95.

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