Negative price divergence warning: Tesla stock technical analysis
Tesla stock technical analysis points to a pending correction in the electric automobile maker's share price. A swift decline towards the $680 support level appears possible, due to the presence of bearish MACD price divergence
Tesla share price analysis shows that a large two-day reversal has taken place, after the electric motor-vehicle maker’s stock price hit a new all-time high, just below the $970 level.
Tesla stock technical analysis shows that bearish MACD price divergence on the lower time frames is warning of a stronger downside correction back towards the $680 level.
Tesla medium-term price trend
Tesla has been in the headlines over recent days as its stock price hits a fresh all-time high. The electric motor-vehicle company became the most valuable automobile maker in US history.
Bears have no doubt been burnt trying to short the stock this month, as Tesla’s share price racked up triple-digit yearly gains. With the stock breaking all upside targets, traders are now looking to the $1,000 level to offer interim resistance.
Tesla share price analysis shows that the stock is at its most overbought ever, with the RSI indicator on the daily time frame trading above 80, while the MACD indicator is still issuing a buy signal.
Due to Tuesday’s huge one-day reversal, key resistance is now located at the $970 level. The daily time also shows that the stock may start to trade in a new higher range between the $800 to $680 levels
Tesla short-term price trend
Tesla stock analysis over the short term shows that bulls are only in control while the price trades above the $860 level.
The short-term technicals are warning that a stronger downside correction may take place in Tesla’s share price if the $700 support level is broken.
Bearish MACD price divergence is present on the lower time frames, and is currently warning of a technical correction back towards the $680 support level.
Traders should note that the 15-minute time frame is where the bearish MACD price divergence has formed.
Tesla technical summary
In my experience, the lower the time frame that MACD price divergence is present, the quicker the divergence will be reversed.
Tesla share price analysis highlights that a strong technical correction in the stock could take place towards the $680 level due to the presence of bearish MACD divergence on the 15-minute time frame.