“Love born in the brain is more spirited, doubtless, than true love, but it has only flashes of enthusiasm; it knows itself too well, it criticizes itself incessantly; so far from banishing thought, it is itself reared only upon a structure of thought.” — Elon Musk tweet, 8/23/2018.
If you skipped the extensive hour-by-hour coverage of all the news surrounding Tesla and its boss and just looked at the charts of price action, what information, if any, could you derive?
The company that makes the quiet car that requires no petroleum has been all over the financial and business news lately. Indeed, an interview with Elon Musk, Tesla’s unique and colorful Chief Executive Officer, was the lead story on the front page of the New York Times recently.
He’s a newsworthy guy these days, especially after announcing via Twitter that he’d be taking the company private at $420 per share with “funding secured” from the Saudi sovereign wealth fund — and then, yesterday, taking it all back and letting us know he had changed his mind and would be keeping it as a public company. You know, with stock you can trade or invest in, if you’re brave.
Typically, CEO’s of publicly traded companies make sure to file such information with the regulatory authorities first before blasting it to the entire world via the Internet’s favorite discussion forum. I believe they are required to do so.
So, you’ve been hearing a lot of news stories about Tesla and many profiles of Musk.
For a moment, though, let’s leave all of that alone and just assess what buyers and sellers of its stock have been up to, as shown on relatively simple charts of price — with no reference to any underlying stories or rumors about the company or the CEO.
Here’s the Tesla daily chart:
It seems to be up trending within a wide range of price, at least from the April low to the August high. I’m surprised that Tesla peaked at 380 after the CEO announced it would be going private at 420 — usually in such cased, price blasts to meet the announced take-out price, more or less. That it could only make it to 380 showed a lack of belief among investors that turned out to be on-the-money. Note that the relative strength indicator (above the price chart) and the moving average convergence/divergence indicator (MACD, below the chart) are both show negative divergences.
Here’s the weekly chart:
The company remains in an uptrend from the early 2016 low. It’s been running into solid resistance at the 390 level. The 2 momentum indicators are diverging negatively from price.
Here’s the monthly Tesla chart:
The first thing you notice is that 2013 was a very good year for the price of Tesla stock. It’s still trending upwards and, as with the daily chart, you can see the negative divergences that have formed on the RSI and MACD indicators.
I do not hold positions in these investments. No recommendations are made one way or the other. If you’re an investor, you’d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.