What's going on moon gang, i hope you're having a phenomenal day. My name is matt and in this video i will be talking about tesla and its brutal sell-off that closed out the month of october i'll be doing a technical breakdown of tesla stock. So we are better prepared for whatever happens next i'll also be laying out my personal plan moving forward as it relates to tessa, but before i dive into that, if you're new to the channel don't forget to join the moon game by hitting the subscribe button. My goal is hit 5 000 subscribers by the end of this year, and your help with that would be truly appreciated.

Also, it would be great if you could drop a like, because it really helps with getting this video in front of other people who may be interested and now with that out of the way, let's get started the stock market just closed for the last trading day. In the month of october - and i guess you could say it was being pretty festive because things are scary - the s p 500 dropped one percent, the nasdaq 100 dropped two and a half percent, and even tesla took a five and a half percent hit tesla, which Trades under the ticker tsla ended the day at 388, which means that it now has a market cap of 387 billion. In other words, in one day, it lost 20 billion dollars in value. You don't even want to do the calculation from october 12th until now, because that's even more scary over the past week, it's down eight percent over the past month, it's down 14.

But if you were fortunate enough to invest in tesla at the start of the year, you would be up 362 percent, since we are about to start a new month of trading. Let's do a quick recap on how tesla got to where it is in mid-august. It was announced that tesla would be going through a five-for-one stock split and this prompted an 82 rally. But when the stock split actually went through, there was an abrupt drop and at one point it was even down 34 from this low.

It managed to bounce, and then it was ping-ponging back and forth and it filled out this wedge. But at the start of october there was a bullish breakout from there. There was a re-test of this top trend line and then the stock was able to push its way upward and make a new high relative to the previous one. Unfortunately, the resistance at 462 proved to be too much supply for the bulls to handle and the stock was swiftly rejected and it came back down to this bottom trend line.

I personally thought there was an incredibly good chance of tesla bouncing at this point, because there was the technical support of this trend line the support at 412, and then there was also a very bullish earnings announcement. Unfortunately, the trend line gave way and the bull camp couldn't make their stand at the support of 412, and then that brings us to today the first half and the second half of october proved to be two very different stories. At first, we had an 11 rally and then, from october 12th, until now, we've come down by 16. In my personal opinion, this recent sell-off has a lot more to do with the overall market and the volatility surrounding the upcoming election rather than tesla itself.

With that being said, though, i know it doesn't make, this pain hurt any less. Unfortunately, i still think there's some more downside ahead, since the bears were able to push it through the support at 412 and the recent low of 406 there's not much in the way of stopping it from dropping all the way to the next region of support between 360 and 350. from the most recent close, that would be an additional decline of eight percent, and if the polls can't make the stock bounce there, we would then be looking at 330, which would be a decline of almost 15, but to be fair. If i'm wrong about this and things somehow magically turn around, i would expect the next resistance to be at the psychological level of 400, which would be a gain of 3 percent.

Then the previous support of 412 would turn into resistance, and that would be a gain of 6 percent, and just so you know for tesla to return to its all-time high at 500. That would be a gain of 29. Now that we know, what's going on with the daily time frame, let's switch over to the four-hour chart to get a more detailed idea about. What's going on when you include pre and post-market training, you can see that there's a new technical structure, this blue wedge that wasn't apparent on the daily chart.

Back on september, 8th, we had the bottom here at 310, it quickly shot up to 362., came back down and made a new higher low at 354 and ended up double topping at 460. from there. As i said before, i thought there was an extremely good chance of tesla bouncing somewhere between 430 and 412 to continue filling out this wedge from a technical perspective, things look bullish and fundamentally things were also pretty solid. Clearly that didn't happen because we had this technical structure breakdown and then this support failed and that's exactly why i sold all of my shares at tesla early this morning, around 9 30.

9 45. I sold my shares at 405, which was essentially my cost basis. I'm in no way happy that this was a scratched trade, because, just recently i was up over 50 dollars per share. To be fair, though, i would rather be break even than in the red, and this was my trading plan all along, and i explained that in my previous tesla videos, so i'm pretty happy that i was able to stick to it moving forward.

This has not changed. My opinion on tesla in the slightest i'm still a long-term bull and i think that'll make a new all-time high in the year 2021. When this region of support broke, i sold for two key reasons: number one i'm trying to reduce my overall risk heading into the election, because there is quite a bit of volatility and number two. It frees up capital to buy even more shares of tesla in this region of support.

It didn't make much sense to me to hold through this downturn and bounce when there wasn't much in this overall region that could catch the stock. Why not just break even on the original trade and then buy more shares of tesla in this region of support where there is a decent shot that it could pull a u-turn? I viewed the overall situation as a win-win, but if you think i played it improperly feel free to, let me know in a comment, i'm more than happy to learn from you as a word of caution. If the support between 360 and 351 doesn't hold, that would mark a new lower low for tesla stock and it would officially be a change of trend from bullish to bearish. If enough demand isn't found at the next support of 330, things would get ugly and they would get ugly pretty quick.

I'm in no way saying that this is definitively going to happen. I'm just trying to get you prepared for multiple scenarios. In fact, i think the most likely situation is that the stock bounces in this region of support in my previous tesla video, i was calling for 350 and it got a fair amount of dislikes, because i wasn't being supportive of the bull case bias. You have to understand that i'm a tesla investor - i don't want the stock to drop.

I would prefer that it goes straight to the moon, but with these videos i'm trying to provide as much value as i can, and i do that by accurately explaining what i'm seeing in the charts. I fully admit that i'll get some things wrong, but also get some things right. If you want to be a successful trader or investor, it's always good to consume multiple opinions, as things continue to develop both fundamentally and technically i'll, make sure to keep you updated in future. Videos also keep you posted on when i buy more shares of tesla.

Make sure you have your notifications turned on, so you don't miss any of those videos. To sum things up, i am still a long-term bull on tesl. Not only do i want the company to succeed, but i strongly think that it will i'm just waiting for the perfect opportunity to reinvest with that being said, though, these are my own opinions, so make sure to do your own research. I would love to know your thoughts on tesla in a comment below at what price level do you think the stock will bounce thanks for making it to the end of the video? Your support truly means a lot to me.

If you enjoyed this video, don't forget to drop a like, and if you haven't already don't forget, to join the moon gang by hitting the subscribe button and as a quick side note if you're interested in the charting software that i use there's a link to a Free 30-day trial in the description of this video and there's also a link to the weeble trading platform, they're, currently running a deal where, if you sign up and make a deposit of 100 you'll, be awarded three free stocks, one of which could be valued up to Sixteen hundred dollars, i would highly recommend, checking both out thanks for watching and until next time best of luck in the markets. You.