Stock Of The Day: Will The Tesla Breakout Hold?

Trading in Tesla, Inc. (NASDAQ:TSLA) is quiet Friday. But many traders are watching it closely. If the current support holds, it could be a bullish sign that may indicate a move higher into the end of this year. It’s why Tesla is the Stock of the Day.

You can see on the chart below that there had been resistance for Tesla around the $470 level.

When the shares reached this price in early October, they reversed and sold off. The same thing happened in late October. After reaching $470, they once again headed lower.

But this resistance has been broken. Some traders are now waiting to see whether the breakout holds.

Essential price levels can form in markets because of remorse and regret.

For example, traders who bought shares at around $470 in early October regretted their decisions to do so after the stock sold off. A number held onto their losing positions, but when the stock returned to their buy prices and they had the chance to exit at breakeven, they placed sell orders.

Read Also: Altimmune’s MASH Drug Shows Durable Liver, Weight Loss Gains At 48 Weeks

The large concentration of these orders created resistance at the level again.

Now, a different emotion may come into place. This would be sellers' remorse.

Some of the people who sold around $470 now regret doing so because the price is higher. Some decided to buy their shares back if they can get them at the same price they were sold for.

So these remorseful sellers placed buy orders around $470, and the large quantity of these orders converted the resistance level into a support level.

Traders and investors are watching to see if Tesla can hold above this support. If it does, there is a good chance a new uptrend forms.

Good traders understand how important psychology and emotions are for a market.

They understand that buyer remorse can keep resistance intact. They also understand that seller remorse can turn resistance levels into support levels. This knowledge can lead to profitable trades.

Read Next:

• Wall Street Got Smoked By These 20 Stock Markets In 2025

Image: Shutterstock