A Pause or Pullback for Tesla’s Mighty Rally?

[Trading With Larry Benedict]( A Pause or Pullback for Tesla’s Mighty Rally? By Larry Benedict, editor, Trading With Larry Benedict One of the best-performing stocks this year is Tesla (TSLA)… Its peak last week was a massive 175% gain from its January low. TSLA surged 80% in just the last six weeks alone. But the strength of that surge higher pushed TSLA a long way into overbought territory. TSLA turned lower last week as buying momentum started to dry up. So will this emerging pullback grow into something bigger? Or is it just another pause before TSLA tries to break higher again? Recommended Link [WARNING: 110 Banks Preparing for Digital Dollar]( [image]( If you have any money in the U.S. banking system, pay close attention because… Bank of America is warning its clients that ALL checking accounts are likely to be replaced with digital dollars soon. And it’s not just Bank of America. This former VP of a major U.S. investment bank just released [this list with more than 110 banks that are preparing to do the same.]( Is your bank on the list? [Click here to find out.]( -- Buying Momentum Following Through The tail end of TSLA’s downtrend ran from November 2021 through early January this year. TSLA lost three-quarters of its value in 14 months: Tesla (TSLA) [Image] Source: eSignal That down move petered out as the Relative Strength Index (RSI) formed a ‘V’ and rallied from oversold territory (left orange line). In two previous similar moves, the RSI was unable to break up through resistance (green line at ‘1’ and ‘2’). But this time, buying momentum followed through. And TSLA rallied up to its peak at ‘A.’ The shorter-term 10-day Moving Average (MA, red line) broke above the 50-day MA (blue line), which also confirmed the trend. Yet the RSI’s reversal saw TSLA roll over at ‘A’… As you can see (left red circle), the RSI made an inverse ‘V’ and reversed lower. After tracking around support, the RSI broke down into its lower band. That dragged the 10-day MA bearishly back below the 50-day MA. As a result, TSLA fell from its February high (‘A’) into April… Take another look: Tesla (TSLA) [Image] Source: eSignal Then, a repeat of the previous RSI pattern (right orange line) enabled TSLA to form a higher low at ‘B.’ TSLA rose along with two bullish technical signals: - The RSI broke up into its upper range and continued to track higher. - The 10-day MA crossed above the 50-day MA and accelerated higher. But the RSI showed that TSLA was massively overbought (right red circle). TSLA peaked at ‘C’ and began to fall in the middle of last week as the RSI slipped. Now the RSI is tracking on the overbought line. So what am I looking for around here? 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. An Emerging Move Just because the RSI is on the overbought line is no guarantee that a stock will fall. Often, the RSI can track along this level for an extended period when a stock is in a long-term strong uptrend. So if the RSI’s recent fall fizzles out, any TSLA pullback could be short-lived. We’ll need to see the RSI continue down toward support for TSLA’s emerging pullback to develop into something bigger. Such a move could see TSLA testing the $240 level. I’ll also watch the action of our MAs. Any developing pullback from TSLA would be further confirmed by the 10-day MA converging back toward the 50-day MA. Regards, Larry Benedict Editor, Trading With Larry Benedict P.S. If you missed my Bitcoin Skimming event this past Sunday, then be sure to catch the replay before it goes offline at midnight tonight. There, I showed how you can profit from bitcoin without the hassle of opening a crypto wallet or exchange account. Even better, we can profit whether bitcoin goes up or down. My followers generated an average of $1,503 in a week using this trading strategy – which I call “bitcoin skimming.” To watch before midnight, simply [go right here](. Mailbag Do you think Tesla’s rally will resume? Or is it headed for a fall? Send your thoughts to feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [He Declined to Go on CNBC – Now He’s Finally Revealing His “Millionaire Secret”]( During the 2008 financial crisis, millionaire trader Jeff Clark stunned the world when he managed to double his readers’ money 26 TIMES… CNBC caught wind of this and asked Jeff to come on live TV to explain his secret. Jeff politely said no. And now, years later, Jeff is back to finally bring this secret into the light. …Revealing how anyone can collect returns of huge gains in just 8 days… in bullish AND bearish markets! And why you need to IGNORE 99.9% of the market, instead focusing on only ONE stock. 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