Some wild things are happening in the stock market. Early this week I talked about four stocks to watch and yesterday I brought one of them to your attention as a breakout candidate before the market opened.
Well once the market opened the stock took off for a 4.53% gain and was up at one point during the day almost 9%. But that 4.53% gain still managed to put it on many lists of people following the top gainers!
What led to the move was a simple breakout of the consolidation pattern.
There were was no big news on the stock – it was the pattern that triggered.
And that’s what is happening in the markets at this moment – it is pure price action that matters now and not news.
Now that we are well into the earnings season what is happening is telling us that this is more the case than ever before.
Boeing had earnings yesterday and they were awful. They also announced that they were halting their stock buyback operation. And the stock didn’t dump.
However, Caterpillar posted good earnings and saw its stock drop over 2% anyway.
More than 20% of the S&P 500
That’s bad, but it hasn’t mattered yet to the stock market.
Yes, some individual stocks are not acting as you would think they should to their earnings while others are going up when you think they shouldn’t.
We are in a moment that all that matters is pure price action.
Today the stock to watch in regards to price is TSLA. Last night it reported a crushing loss, posting one that actually missed analyst estimates. The company lost $2.90 a share on revenue of $4.54 billion, which was under the expectations for $5.19 billion in revenue.
Would you want to buy a car from a company that is likely to go bankrupt?
But all that matters is the price chart.
If TSLA breaks support it will begin a justified price collapse.
If it holds here though than the robots and daytraders and Musk fans can continue to buy it.
Take a look at the chart.
Support on TSLA is at $254. That level has held for the past twelve months and triggered buying and short covering.
A close below $254 will mark the beginning of a long drawn out decline to what will likely be ZERO for TSLA.
What matters now and tomorrow and next week will be how the stock price action reacts to last nights disaster earnings?
Can TSLA dodge another bad earnings report like it has before or
I try to help you as much as I can in the free posts and emails by showing you stocks like WILC before they move and sharing with you the most important news headlines every morning like the President’s daily brief.
But there is much more in my private Power Investor group for you.
Trading patterns and using strategies is key now. Grab my book Strategic Stock Trading.
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