TSLA Descending Triangle Break Weekly Options Play
מעודכן
Description
This idea originates from a different idea in which I interpreted the chart as a Symmetrical Triangle.
I believe this interpretation was incorrect due to the consideration I put on the beginning of the gap up into the pattern. The opening price of the first candle following the gap is a technically irrelevant fact, unlike the support found after TSLA falls from the high, in this case the ATH, where it bounced three additional times, each time producing a lower high (a Descending Triangle).
The Descending Triangle is bearish in purport, displaying a lower demand zone, and a descending liquidation zone, representing a growing overhead supply vs a stationary demand zone, until the sellers become stronger than the buyers (or buyers reverse), overtaking the lower boundary.
Historically speaking, it is common for the lower boundary of the preceding pattern to become a new resistance, where once-buyers will be happy to liquidate, having been "made whole".
The price target implied by the pattern is between 320 and 670 or less than 670.
As a take from contrarian traders, such as Brent Donnelly, there is an application of the Magazine Cover Bias today, as TSLA CEO, Elon Musk, has been chosen as "Person of the Year" in time magazine.
This is very reminiscent of 99', when AMZN CEO, Jeff Bezos, was chosen as "Person of the Year", shortly before the beginning of AMZN's two-year bear market.
(Related idea linked)
Using long puts to maintain a positive vega ahead of FOMC this week.
Long Put
Levels on Chart
SL > 1000
PT : 700
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
12/31 850P
R/R & Breakevens vary on fill.
The price target set with the idea is higher than the pattern implied price target due to the expiration of the position.
This position is updated in the linked Related Idea, where there is a better explanation of alternate short strategies.
Manage Risk
Only invest what you are willing to lose
This idea originates from a different idea in which I interpreted the chart as a Symmetrical Triangle.
I believe this interpretation was incorrect due to the consideration I put on the beginning of the gap up into the pattern. The opening price of the first candle following the gap is a technically irrelevant fact, unlike the support found after TSLA falls from the high, in this case the ATH, where it bounced three additional times, each time producing a lower high (a Descending Triangle).
The Descending Triangle is bearish in purport, displaying a lower demand zone, and a descending liquidation zone, representing a growing overhead supply vs a stationary demand zone, until the sellers become stronger than the buyers (or buyers reverse), overtaking the lower boundary.
Historically speaking, it is common for the lower boundary of the preceding pattern to become a new resistance, where once-buyers will be happy to liquidate, having been "made whole".
The price target implied by the pattern is between 320 and 670 or less than 670.
As a take from contrarian traders, such as Brent Donnelly, there is an application of the Magazine Cover Bias today, as TSLA CEO, Elon Musk, has been chosen as "Person of the Year" in time magazine.
This is very reminiscent of 99', when AMZN CEO, Jeff Bezos, was chosen as "Person of the Year", shortly before the beginning of AMZN's two-year bear market.
(Related idea linked)
Using long puts to maintain a positive vega ahead of FOMC this week.
Long Put
Levels on Chart
SL > 1000
PT : 700
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
12/31 850P
R/R & Breakevens vary on fill.
The price target set with the idea is higher than the pattern implied price target due to the expiration of the position.
This position is updated in the linked Related Idea, where there is a better explanation of alternate short strategies.
Manage Risk
Only invest what you are willing to lose
עסקה פעילה
Filled @ 12.6.העסקה בוטלה באופן ידני
Got even today before the FOMC, liquidated most shorts.Filled @ 18.65, +48%.
הערה
Upper trendline rejection.Still looks bearish
פרסומים קשורים
כתב ויתור
המידע והפרסומים אינם אמורים להיות, ואינם מהווים, עצות פיננסיות, השקעות, מסחר או סוגים אחרים של עצות או המלצות שסופקו או מאושרים על ידי TradingView. קרא עוד בתנאים וההגבלות.