Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Access both platforms from your single Saxo account.
Technical Update - Tesla testing key support in bubble implosion scenario
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Since Tesla shares took off back in 2020 the share price has formed a classic bubble formation. With shareholders having lost 50% since peak there could be more agony ahead.
Taking out key support around current level is likely to fuel another heavy sell-off to price levels not seen since 2020 i.e., 30-45% lower from here
Tesla is trading lower Pre-Market this morning currently 5% down an indicated opening around $211 which is close to the support at around 208. A support that was broken last week confirming the downtrend Tesla has been trading in since it broke below 265.
A down trend, illustrated by the falling wide channel lines i.e., lower highs and lower lows, that could take Tesla much lower.
A break below last week’s low at 204 is likely fuel another heavy sell-off. A sell-off that can take Tesla to test the strong support around 180.
For Tesla to reverse the medium-term down trend a close above 314.67 is needed.
Short-term a correction up to around 246 could be seen if Tesla closes above 229.82. RSI is showing negative sentiment on both daily and weekly supporting the view of lower price levels.
No divergence on daily RSI.
Looking at a monthly chart going back to when Tesla was listed on the Exchange Tesla is showing a clear Bubble pattern. During the bubble build-up there are at least one but sometimes two larger corrections called Bear traps or Pre-peaks.
When the price starts to decline i.e., when the bubble implodes the price always comes down to at least the last pre-peak low but quite often down to the first pre-peak.
Sometimes the price comes all the way down to the base level before prices really takes off - see Bubble chart at the end of this article. (During the Tech bubble implosion back in 2001-2003 Nasdaq dropped below its pre-peak low).
When the price starts to decline i.e., when the bubble implodes the price always comes down to at least the last pre-peak low but quite often down to the first pre-peak.
Sometimes the price comes all the way down to the base level before prices really takes off - see Bubble chart at the end of this article. (During the Tech bubble implosion back in 2001-2003 Nasdaq dropped below its pre-peak low).
All the signs of top and reversal were in place leading to the sell-off. RSI divergence warning about an imbalance and weakening of the uptrend, declining volume since mid-2020 and finally the Doji Evening top and reversal pattern.
Currently Tesla is trading close to the lows of the Pre-peak 2. If prices drop below the lows of that pre-peak/correction Tesla is likely to drop down into Pre-peak 1 area and test the Fibonacci 0.618 retracement of the all-time low and all-time high just below top of the pre-peak 1 area at 158.95.
Typical Bubble Pattern
Note: The author is holding a short position in Tesla
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)