BY LICIA LESLIE
February 7, 2024
Hi Shoppers,
I am seeing bullish signals in Tesla (Ticker: TSLA).
Yesterday’s action created a bullish engulfing candle:
A bullish engulfing candle is found at the bottom of a downtrend and may be signaling a change in that trend.
The session begins with the bears still in control keeping the downtrend intact.
During the session, the buyers/bulls find a level to enter the market, the shorts decide to cover and the stock rallies.
This forms a large bullish green real body. The real body is the difference between the opening and closing prices.
A bullish candle is formed when the opening is lower than the closing.
A bullish engulfing candle completely takes over and engulfs the previous session’s candle.
This signals a possible change in the downtrend.
Remember the Relative Strength Index Divergence I talked about in SPY on Sunday?
There is a bullish RSI divergence in TSLA:
As the stock traded lower, the Relative Strength Index had higher lows.
This is a bullish signal.
The options in TSLA are not cheap.
I like buying the Feb16 187.50 calls outright:
Next stop in TSLA is $196.
Trade Review
SPDR S&P 500 Trust ETF (Ticker: SPY) has not traded lower, yet.
I am still in the 493/488 put vertical for Friday. I think SPY will trade down to $189.40.
Thanks for Reading … See You Next Tuesday,
Licia Leslie
Licia Leslie
Head of Technical Analysis
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