{"id":60805,"date":"2022-08-01T17:42:43","date_gmt":"2022-08-02T00:42:43","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=60805"},"modified":"2022-08-01T18:13:09","modified_gmt":"2022-08-02T01:13:09","slug":"tesla-inc-what-potential-rally-fatigue-looks-like","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2022\/08\/01\/tesla-inc-what-potential-rally-fatigue-looks-like\/","title":{"rendered":"Tesla, Inc: What Potential Rally Fatigue Looks Like"},"content":{"rendered":"\n

In “What Recession? Market Shows Love As Apple Leads the Way<\/a>“, I raised a yellow flag on a critical test for the market at the overbought threshold. I described the conditions dividing the market from a bearish reversal and an extended bullish rally. The stock market left the situation in suspense by gapping down, falling further, rallying to new highs on the day, and then falling back to just under the day’s open. Those moves produced a trading stalemate. However, Tesla, Inc (TSLA) provided a clear trading example: potential rally fatigue in the form of the dreaded shooting star.<\/p>\n\n\n

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\"Tesla,
Tesla, Inc (TSLA) closed flat after gapping up and briefly breaking out above its 200DMA. The resulting shooting star candlestick pattern is the classic sign of rally fatigue.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n

A shooting star<\/a> is a reversal pattern that carries its highest significance after an extended and\/or strong rally in price. The candlestick suggests exhaustion because buyers are unable to maintain momentum as sellers push price off a significant intraday high. Today, TSLA gapped higher for a 1.4% gain, rallied as high as up 5.0%, and finally faded back to a flat performance for the day. Not only did sellers succeed in pulling off a significant reversal, but also they eliminated what would have been a bullish breakout above resistance at the 200-day moving average (DMA) (the blue line above). A fakeout like this one carries doubly bearish weight.<\/p>\n\n\n\n