1/ Not Enough Conviction in Tesla
2/ Game Over for Super Micro Computer?
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1/
Not Enough Conviction in Tesla
Tesla is trading within a symmetrical triangle which remains in force until the price is able to break out (or breakdown) of it. In other words, a move through support or resistance should determine the next direction of the stock price, currently there is not enough conviction in either direction to determine the outcome.
Once the price is able to move out of this symmetrical triangle, the Fibonacci retracement levels will come into play. These retracements are arrived at by first measuring a complete trend up or down, in this case the June 2019 to November 2021 advance. These calculated levels then act as support on the way down for price, and once surpassed, they then act as resistance levels. The levels outside the symmetrical triangle are $260 on the way up and $165 on the way down.
2/
Game Over for Super Micro Computer?
From an all-time high at $1229, SMCI stock price fell (collapsed?) to a low of $382.80, in just 6 months. Can this decline still be considered as a pullback within an uptrend? This could actually be qualified as a reversion to the mean, as the price has now reversed back to the 20-month moving average, which has been acting as a dynamic support since 2020.
As long as the price trades above the $380 support zone, which represents the current month low as well as a Fibonacci extension taken off the February 2015 to October 2018 decline, it is not game over yet for Super Micro Computer.
3/
Prime Time for Disney
Disney is currently at a very interesting junction.
Last month, the price was able to bounce off an uptrend line in place since the price made a low in 1974 (you read correctly). The stock bounced off this uptrend support on another 3 occasions, twice in 1984 and once again in 2009. This could suggest that the cyclical decline is over and structural uptrend can resume.
At the same time, the price action over the last 10 years (remember, this is a monthly chart, we are looking at the long-term picture) created a rounding top pattern, which, if completed, i.e. the price breaks below the $78.50-$79 support area, could extend the decline since its March 2021 price high, sending the stock at levels not seen since 2011!
As the price is still trading above its long term trendline support, the structural uptrend is given the benefit of the doubt.
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Originally posted 13th September 2024
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