(MENAFN- Daily Forex)

• Tesla gapped to the upside during the trading session on Wednesday, as we continue to see this market try to recover.
• We are in a bit of a“larger holding pattern” at the moment as the next earnings report is a week from Wednesday, meaning that traders will be waiting patiently to find out what the forward guidance is, and of course sales during the previous quarter.

Technical Analysis

From a technical analysis standpoint, this is a market that continues to be very noisy, as we have been consolidating between the $400 level on the bottom, and the $480 level at the top. The $500 level is a large, round, psychologically significant figure and the gateway to much higher pricing. Keep in mind Tesla also has the 50 day EMA reaching near the $400 level, so I think that is something that you have to pay attention to as well. Regardless, I do not have any interest in trying to short this market, because of the move to the upside but there is likely quite a bit of resistance above offering a little bit of a short-term ceiling, probably lasting until we get the earnings call.

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Ultimately, I do think this market breaks out to the upside, mainly due to the fact that so many people hold Tesla in their retirement accounts, and most ETFs are at least somewhat exposed to Tesla these days, as money managers continue to pile into the same handful of stocks, in this case known as the“Magnificent 7.” As long as that's the case, it's difficult for Tesla to really break down significantly, and the last time we saw it happen it was about a lot of drama between Donald Trump and Elon must. Quite frankly, nothing came of that as would have been expected, and those who ignored the nonsense and bought the dip have since doubled their money. I am still a“buy on the dips” type of trader in this market.

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