Can This “Mag 7” Fallen Angel Catch Up?

[Trading With Larry Benedict]( Can This “Mag 7” Fallen Angel Catch Up? By Larry Benedict, editor, Trading With Larry Benedict Tesla (TSLA) dominates the U.S. market for electric vehicle sales. But lately, its stock has slipped from prominence among the “Magnificent 7” mega-cap stocks. As a reminder, this group includes Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). And overall, they’ve been a big driver of the market’s rally. The S&P 500 bottomed in October 2022 and is up 44% since then. And members of the Mag 7 have delivered spectacular gains during that window, like Meta’s 308% return. In contrast, TSLA is lagging badly. It’s down 21%. Yet signs are emerging that TSLA could get back on track. Today, let’s look at what the chart is telling us about its chances for a recovery. Can TSLA rejoin the ranks of these leading stocks? Recommended Link [What should you be doing to “A.I.-Proof” your retirement?]( [image]( A.I. is creeping into every aspect of our daily lives… According to billion-dollar fund manager, Louis Navellier, it’s never been more important to A.I.-proof your wealth. He lays out three simple steps to take ASAP in his latest video. [Click here to watch it now.]( -- Stuck in a Downtrend TSLA has a reputation for delivering big gains. In the aftermath of the pandemic, TSLA soared 1,163% from the start of 2020 to the end of 2021. But since then, it’s been stuck in a downtrend. You can see that in the chart below, which goes back to late 2021. [chart] The S&P found a low in October 2022. But TSLA plunged below the 50-day moving average (MA, blue line), as you can see in the chart at 1. TSLA tried to recover lost ground in 2023. Yet it peaked at 2 last July. Since then, it has been in a downtrend marked by a series of lower highs and lower lows. To make matters worse, the stock took another dive below the 50-day MA at the start of this year (see 3). That’s as the S&P got off to a solid start with a gain of 9% in 2024. But one key technical indicator shows that TSLA is trying to put in a short-term bottom. Here are some key levels that TSLA needs to clear in order to turn things around… Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Positive Energy Is Building The relative strength index (RSI) reveals several key developments behind TSLA’s trend. [chart] Since the downtrend that started at 2 last July, rallies in the stock price saw the RSI barely get above the 60 level. The 60 level on the RSI can become an overbought signal during a downtrend. But look at what has happened since late January… The stock price has been pulling back further. But the RSI is making a series of higher lows that you can see with the dashed trendline. That shows momentum is quietly getting stronger. The positive divergence in the RSI is building, which could lead to a quick rally in the stock price. In that scenario, we could see TSLA cross back above the 50-day MA followed by a rally to over $200. And if TSLA can see more than just a “dead cat bounce,” then the RSI should push above the 60 level. That could signal a new uptrend. On the other hand, if the RSI loses momentum and the stock starts rolling over again, then we should watch how things look around the $150 level. A breakdown there could test the early 2023 low at $100. One way or the other, the next big move in Tesla’s stock will show if it still belongs in the Mag 7 or not. Regards, Larry Benedict Editor, Trading With Larry Benedict [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](