One of the buzzing stocks in the market. The stock has been in an uptrend from the past 4month and the trend has been strong; Recently we have seen a consolidation at the higher level, a consolidation at a higher level is always a warning.A consolidation can break either side Up or Down being a continuous pattern or being a reversal depending on the breakout. The consolidation we are seeing is known as a box where the stock is trading in a zone.

A breakout from a box has many false breakout which is a concern for reacting immediately after the breakout, once the breakout is confirmed the failure rate is less. Trading in a box is not advised as the transaction costing may reduce the profit and we never know that the box is going to touch either side, that is why it is better to trade after the breakout is confirmed.

In our condition if the Breakout is seen on the downside we will wait for the stock to close below the box for 2 consecutive days, we might enter the trade late but this would give a better confirmation and we won't be trapped in a failure, same goes if the breakout is seen on the upside.

Golden crossover is seen in recent days which is a positive signal for the stock; i.e. the 50 day EMA crosses the 200 day EMA from below. If the breakout is on the upside this will add strength to the view.

The RSI is trading in an upper range if this range is breakout on the downside then we will have a concern on the upside and if the breakout in the stock is downwards and the RSI also breakdown then we will get a strong confirmation.

The DMI+ is above the DMI- which suggests the direction is positive, and the ADX is trading just above the DI- which suggests the strength.

Advice : Buy Or Sell if the above conditions are fulfilled.

TESLA

Oct 06 2021

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