Tesla ( TSLA) effected a 3-for-1 stock split on Thursday and the shares moved higher. But Friday is another story.
Let’s check out the charts and indicators post-split.
In the daily bar chart of TSLA, below, we can see that the shares made a small equilateral triangle pattern in August. This kind of triangle pattern could break out on the upside or the downside and right now the charts are tipping lower, in my opinion. The slope of the 200-day moving average line is negative but the 50-day line is still positive.
The On-Balance-Volume (OBV) line looks like it has topped out in mid-August. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside in August and is a take profit sell signal.
In the weekly Japanese candlestick chart of TSLA, below, we can see two noticeable upper shadows above $300 telling us that traders are rejecting the highs.
The weekly OBV line shows a decline from November. The MACD oscillator has been improving but is still below the zero line.
In this daily Point and Figure chart of TSLA, below, we can see a potential price target of $379. A trade at $276 is likely to weaken the picture.
In this weekly Point and Figure chart of TSLA, below, we can see a potential price target in the $484 area. A trade at $276.93 is likely to weaken the picture.
Bottom-line strategy: A lower share price is supposed to attract more traders but that “rule of thumb” may not apply right now for shares of TSLA. The August equilateral triangle (noted above) is likely to break to the downside.