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Tesla and 2 other stocks to watch this week
See what the price charts have to say about three popular stocks: Tesla, DoorDash and Airbnb.
Three brand-name stocks reached their peaks at the beginning of 2021 and have been dropping since: Tesla, DoorDash and Airbnb. Will they continue these bearish moves, or have they hit the bottom?
I ran a technical analysis using charts to find the short-term and long-term price outlook for Tesla, DoorDash and Airbnb in hopes of figuring this out. Here’s what I found.
Tesla has had a rough ride since it reached a $900 peak in February. Since then, it’s lost more than 30%. But is the bottom in sight? Let’s take a look at the TSLA day-by-day chart.
(I used multiple time-frame candlestick charts where each candle represents either four hours, one day or one week. This is often the best type of chart used for deep analysis because it carries the most information on price moves, which helps find high-probability outcomes.)
TSLA stock daily chart, StockCharts.com
Based on the daily chart, on May 13th, the price bounced off support at $570. A support level means that many investors seem ready to buy at that particular price, which preventing the stock from going lower. We have two strong supports near this level: the previous low from mid-March 2021 and the 200-day simple moving average.
Last Friday, a bullish harami pattern formed that may hint at what is to come. A bullish harami is a reversal pattern that appears in a downtrend. This often means the price failed to push lower and that a reversal is coming.
The Relative Strength Index (RSI) also stands at around 30. Everything at 30 or below shows that the price is in oversold territory, which means the price is lower than most investors think the stock is worth. This suggests the price has bottomed.
This setup gives a textbook low-risk, high-reward entry price — especially if you plan to keep TSLA long term. To fully confirm the bullish pattern, though, the price would have to break last Thursday’s high. Here’s how a trade order based on this reading would look:
- Entry: $612
- Stop loss: $525
- Take profit: First target $700, second target $790, third target $900
- Important: If the price fails to move higher and reach the $612 price point, the entry becomes invalid.
Does the weekly chart confirm the reversal?
Yes and no. The weekly chart shows mixed signals. On the one hand, we have the bullish triangle pattern, which is a continuation of the upward trend. On the other hand, we have a non-standard three black crows pattern, which is a bearish pattern consisting of three red candlesticks. This means the downward momentum is strong. Plus, the MACD — a trend-following indicator — shows strong bearish potential because the two lines are too far apart and pointing down.
TSLA stock weekly chart, StockCharts.com
Weekly charts show long-term price outlook. As of now, the bulls and bears are struggling to take over and set direction for this stock. Once the next weekly candle forms on Friday, we should have a clearer picture of what is to come.
DoorDash went public on December 20, 2020. It reached its peak of $256 on January 27, then kept dropping until it reached its lowest point at $110 last Thursday. Can it go lower, or is this the bottom? Let’s see what the charts say.
DASH stock daily chart, StockCharts.com
When it hit the low of $110, DoorDash’s stock made the bullish harami candlestick pattern. A bullish harami is a reversal pattern that shows a temporary bottom. It also coincides with the lower trendline that followed the price and so far has failed to break through. The bullish harami pattern was confirmed last Friday when the price gapped higher and closed at $141.
The daily DASH chart shows the bullish harami pattern and the bullish triangle patterns. A bullish triangle pattern is when the stock is in an uptrend but the price stops moving higher and instead zig-zags slightly lower. This is the result of some profit-taking and new investors getting in on the price pullback.
As the price retreats from the peak, it forms a triangle with the price support and resistance zones. Both the bullish harami and the bullish triangle often mean the price has a high probability of moving higher. The MACD has also started to turn, which is confirmed on the lower time frame chart. This means the downtrend is losing momentum.
DASH stock four-hour chart, StockCharts.com
The four-hour time frame chart where each candle represents four hours, shows the MACD has already crossed and formed a bullish divergence — meaning the MACD bottom is higher than the price bottom. On this chart, however, the $141 is at the price resistance level of the 50 moving average. This often means the price may drop a little lower before continuing to the higher trendline.
Here’s how this setup is often traded if you missed the gap:
- Entry: $126
- Stop loss: $105
- Take profit: First target $150, second target $175, third target $220
DASH stock weekly chart, StockCharts.com
The long-term weekly DASH chart shows the bullish triangle and the possible bottoming out of the price with a long white candle that almost cancels out the previous week’s bearish candle. If the triangle pattern is confirmed and we see a break above $150, the price would have a high probability of reaching the $220 price target.
Airbnb went public on December 9, 2020. It had a successful IPO that brought the stock price as high as $219 in February. Luckily, for those who wanted to invest in this stock, the price dropped and gave them a chance to buy it cheaper. But is this the right time?
ABNB stock daily chart, StockCharts.com
The daily ABNB chart offers some interesting insight. First, the price bounced off $135, which is the support price zone of January this year. Plus, the last two daily candles formed a combination of tweezer bottom and a bullish harami pattern, both of which are bullish reversal patterns. This gives a high probability that the price will go higher, at least in the short term.
ABNB stock weekly chart, StockCharts.com
The weekly price chart isn’t so convincing, though. The price did stop at the support level of around $135-$140, and it did show a long candle wick, meaning the bears tried to break lower but failed. However, the downtrend seems intact with a set of continuous bearish candles.
With bullish outlook on the lower time frame chart, the weekly support zone may have been confirmed — meaning the price drop may stall here. But we’ll need to see what the end of this week will look like to have a clearer longer-term outlook.
Based on what we saw so far, this is how the trade setup would look:
- Entry: $144
- Stop loss: $120
- Take profit: First target $163, second target $180, third target $192
Keep in mind, these aren’t recommendations. It’s what the charts are telling me. Consider them a starting point for your own research.
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