Tesla share price looks ripe for a breakout as the market forms a contracting triangle that may break either way. If the triangle acts as a continuation pattern, the move to follow should lead to more weakness. On the contrary, if it acts as a reversal pattern, bulls are in for more strength.
Tesla traders are missing the meme stocks party this year. Despite extreme interest and speculation on names like GameStop or AMC, retail traders did not show a particular interest in Tesla this year. In fact, the share price of Tesla is down -14.47% this year, in sharp contrast to the performances seen in the last years.
In part, this could be the effect of Tesla’s investment in Bitcoin. Ever since the company announced that it invested $1.5 billion in Bitcoin, its share price became extremely correlated to the price of Bitcoin, thus not trading on internal fundamentals anymore. It would be interesting to see if Tesla did hold its Bitcoins, and we will find out soon when the Q2 2021 earnings are released.
Bulls may want to wait for a daily close above $640 to go long with $700 as target and $580 as stop. Bears may want to wait for a daily close below $570 to go short with a stop at $630 and a target at $400.
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