Tesla Forms A Potential Megaphone Topping Pattern

Tesla (NASDAQ:TSLA) is FXCM official websiteshowing considerable relative strength compared to the S&P 500 this week. However, it is still down -30.49% below its respective 52-week highs, and could still be vulnerable to a Megaphone Top Pattern according to basic principles of technical analysis.

Any break above the $890 level would increase the likelihood of the next confluence of Fibonacci resistance near the 947.77 level and negatively affect the 50-day moving average. Unlike the S&P 500 and NASDAQ is trading above the 200-day moving average.

Price stalling at automated Fibonacci (red) resistance confluence of the declining 20-day moving average resistance today on modestly heavier volume than the average with volume ticking 2.9% higher today (24.92M shares), suggesting that any failure to regain and hold above the recent high ($890) increases the likelihood of a retest of lower Fibonacci support levels as follows:

• Support: $824.16, $785.98, 747.79.
• Resistance: $921.22, $947.

Tesla stock price chart.

Noteworthy options alerts in TSLA today show that 1,146 notable options trades were executed today with an average expiry of 10 days at an average 6% out of the money with a total of 147.2k contracts with 244.4M in premium with 15% of the options trades being unusually out of the money OTM with 5.6M in unusual premium.

There were 134.1k sweep contracts also executed today totaling 191.4M with the last notable options alert being a block trade of 50 contracts with implied volatility of 88% when TSLA was trading at 864.96 with a deep in the money strike of 750 at $126 each for $630,000 and expiry is on Apr. 3.

Disclaimer: The author is heavily invested long in TSLA and also hedged with put options.

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