Hey, what's going on, i hope you're having an awesome day. My name is matt and on this channel i talk about stocks trading and investing. This video will be a quick update about, what's going on with tesla, first i'll, be covering the not so good news that just came out about the company and then i'll be doing a full technical breakdown of the stock. Since the start of this week, tesla stock has been in a consolidation pattern, so i'm fully expecting a large move to happen sooner rather than later, but before we get into all of that, if you enjoy this type of stock market content, don't forget to join the Moongig by hitting the subscribe button, my goal is to hit 10 000 subscribers by the end of january, and your help with that would be truly appreciated.

Also, if you're interested in free stocks make sure to check out the links to both weeble and robinhood they're in the description of this video and the promotional deal will be ending on january 15th and now without further ado. Let's roll the tape, so tesla's record-breaking rally ended up stalling out, partly because the chart was overextended and partly because of this tesla slips on model s and model x recall demand from nhtsa tesla stalls after the national highway traffic safety administration. I'm not gon na lie. Every time i read that i think of those guys from super troopers asks for a recall of 158 000 model s and model x vehicles over media control.

Unit failures, tesla, was down after the auto safety agency, made the unusual request in a formal letter to tesla. After upgrading a safety probe in november, saying it had tentatively concluded that the to 2012-18 model s and 16 to 18 model x vehicles contain a defect related to motor vehicle safety. While recalls are a fact of life in the auto industry, it is unusual for the agency to formally demand a recall, automakers, typically voluntarily, agree to a recall, if saw in discussions by regulators or institute recalls on their own accord. If a fall is widely reported by customers, tesla must respond to the nhtsa by january 27th.

If it doesn't agree, it must provide the agency with a full explanation of its decision. Now i do have a few of my own thoughts on this. As this article says, recalls are a fact of life in the auto industry. We don't know if this recall is going to actually happen.

We don't know the severity of what's going on and if it's all true, we don't know the cost associated with fixing it. Basically, there's a lot of unknowns and this storyline is pretty new and will most likely find more out on january 27th, speaking of which there's something much more impactful going on on the 27th related to tesla. Yes, the recall could potentially have an impact on tesla but market calendars, because this will definitively have an impact on the stock. After the closing bell on wednesday january 27th, tesla will be reporting its q4 2020 financial results.

In the past. These earnings announcements have served as a catalyst for both considerable upswings and downswings, so would highly recommend being prepared on both wednesday, the 27th and then again on thursday, the 28th. In the meantime, though, let's check out what's going on in the charts alrighty, this is tesla's daily chart and when the market closed for the day, the stock ended up dropping one percent which puts it at 845 dollars. I don't know why, but emotionally this seems like much more than just one percent, but don't forget the bigger picture from the start of the year until now, tesla's still up 20, and if you were fortunate enough to grab any portion of this run-up.

Let me know by dropping a like this is the current technical situation that tesla stock is in for those of you who are new to the channel. Here's a very quick recap of what's been going on its previous all-time high, that stood for months came at just above five hundred dollars, and this was right after the company's five for one stock split. Unfortunately, after that was hit, there was a sell-off and then the bulk can push it back up and then the bears push it back down and we ended up getting the formation of this triangle, which is also referred to as a bullish pendant in the world of Stock trading and that's because it commonly breaks upward and that's exactly what we saw in tesla and it led to a triple top rejection. At 462.

from there. The stock did sell off with the overall market and we ended up forming a new higher low and then that led to about two weeks of really not much going on and then on november 16th, it was announced that tesla would be included in the s. P. 500 and from there, as you can see, the stock absolutely exploded.

In fact, from the point of that announcement, up until now, the stock is up over 100 percent and let's zoom in a little bit just so we can get a better view of what's been going on. Most recently, we saw that tesla had a failed breakout attempt right above this white trend line. It did end up hitting its current all-time high just above 884, but since then, over the past four days, the stock has been in a consolidation pattern where we're seeing higher lows and lower highs. You'll be able to see all this much better.

On the four hour chart, but for now i would like to bring your attention to this all-time high, which was also associated with this spike in the rsi up to 84ish. This means that the ideal situation moving forward is not only a breakout above this trendline and the current all-time high, but we really need it to bring the rsi with it that it gets above 84. So we don't have a bearish divergent setup. If this does end up happening, i'll, definitely bring it to your attention and describe it in much more detail.

On the other hand, if the exact opposite situation plays out and tesla ends up breaking down, their first support would come at the most recent relative, low and key psychological level of 800, and if the stock does get here, i would recommend being careful because past that We could be seeing a drop all the way down to the region between 725 and 750. now, to clarify i'm in no way saying that this will happen, i'm just letting you know what could happen if the stock were to break below 800. now to get a Better idea of what might happen over the next few training days, and so i can better showcase, what's been going on recently, let's check out the four hour chart before i hop into this time frame. I wanted to quickly mention that the name of this charting software is trading view and if you are interested in trying it out, there's a link to a free 30-day trial in the description of this video, okay back to tesla.

So, from the point of the s, p 500 inclusion announcement up until the start of december. The stock was trading in this upward channel, which we referred to as a bear flag and that's because they commonly break downward. This ended up playing out in tesla and support was found at 540 and from there the bull camp regained control and on three separate occasions. They tried to get the stock back into this channel, but the third attempt was an official rejection and the stock was knocked down to 565.

from there. The stock slowly grinded higher, as we were waiting for tesla to be put into the s p 500, and there was a spike the day before inclusion. After that, it continued to grind higher, and eventually we saw a double breakout of not only this trendline but the previous resistance of 695, which is the price point that a lot of fund managers got their fill on tesla when they were forced to mimic it with The s p, 500 and since then the stock has been on a rally all the way up to 884, let's just zoom in so i can better show you this bullish, pennant. What i mean by that is, we came up in a bullish fashion, and now we have lower highs higher lows and it's formed this triangle and keep in mind that they do commonly break upward.

As of now, my main piece advice to you is that in the world of stock trading, periods of consolidation are followed by expansion and vice versa, as in from late december, all the way. Up until january 8th, we saw a period of expansion in tesla stock and then from january, 8th until now, the stock has clearly been consolidating. This means that once this period of consolidation is over, we will see another big period of expansion now, unfortunately, neither i nor anyone else on this planet can tell you, which way this expansion will be, whether that's up or down. So the best thing we can do is watch these key price levels.

That tesla has been adhering to over the past two weeks. If the current breakout ends up standing, it seems like the line in the sand, for the bears is the region between 260 and 268, because if we get above that, i would fully expect a test of 884 and most likely a new all-time high. If this bullish scenario were to play out, you should know that there is a fibonacci level right around 950, but i'm personally much more interested in that magic, psychological level of one thousand dollars. On the other hand, though, if this breakout doesn't hold - and it ends up becoming a fake out breakout, there's a pretty good shot - that tesla will go back down to reaffirm 800.

If the bull camp can't hold this price level, then there's a pretty good shot that it will continue to drop all the way to the region between 725 and 750, which is where it previously found support in early january. I should probably quickly clarify that i very much want the bullish scenario to play out. In fact, i have quite a few call options on tesla that right now i'm getting absolutely hammered on, but on the other hand, to be a good technical analysis. I want to present the full situation to you.

My personal recommendation to you over the next few trading days would be to pay close attention to how the bears react to the resistance at 868 and to how the bulls react to the support at 830.. This period of consolidation is about to come to an end and, depending on what breaks first, will give us a much better idea of the next major leg in tesla's stock feel free to share your thoughts on tesla when this consolidation pattern finally ends. Do you think that the bulls will win and will see a new all-time high, or do you think that the bears will win and the stock's going to drop to 800 or potentially even worse? Let me know in a comment below as a quick reminder: if you want five free stocks check out the links to both weibo and robin hood, the promotional deal will be ending on january 15th. 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.

Your support is truly appreciated, thanks for watching and until next time best of luck in the markets, you.