Tesla Leads a Rebound in the Nasdaq as Buyers Defend Key Levels

Buy the dip. Buy the dip. Buy the dip. That was the mantra on Wall Street today.

The Nasdaq-100 surged 3 percent, its biggest one-day gain since April 29. Tesla (TSLA), one of the most traded stocks in the entire market, led the bounce.

Elon Musk’s electric-vehicle maker jumped 11 percent following its biggest drop ever on Tuesday. It followed a busy series of events in recent weeks. First, TSLA rallied 83 percent to new record highs after announcing a 5-for-1 stock split. It stalled after issuing $5 billion of new equity to raise capital. Next it crashed after unexpectedly getting excluded from the S&P 500 index.

But then some potentially bullish chart patterns appeared. TSLA’s low yesterday was just $0.25 above its 50-day moving average, a key technical indicator. Trend followers often wait for high-flying stocks to retest the 50-day MA, and Tuesday’s level was close enough to qualify.

TSLA’s price action also resembled a “bullish kicker” candlestick pattern. That’s when a stock knifes lower and rebounds sharply the next day. The bounce also occurred around the $338 area where TSLA peaked in late July. Has old resistance become support?

Attention may remain focused on the company in the next few weeks with the Tesla Battery Day event scheduled for September 22. The agenda isn’t yet known but Musk is expected to reveal advances in electric technology. Keep reading Market Insights for more.

Tesla (TSLA), daily chart, with 50-day moving average and select events.

This article was written by David Russell, TradeStation Securities, Inc., part of the Monex Group Inc, published on 09/09/2020.

David Russell
David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.

Risk Disclaimer: The information above is of general nature only and does not take into account your objectives, financial situation or investment needs. Prior to you make an investment decision, please make sure you carefully read and fully understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other relevant documents that you can obtain from this website. Monex Securities Australia Pty Ltd (AFSL No. 363972; ABN 84 142 210 179) is the Financial services provider. Financial products trading carries risks and may not be suitable for all investors. You are strongly recommended to seek independent financial advice before making any investment decisions.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!