{"id":6850,"date":"2020-07-01T15:05:06","date_gmt":"2020-07-01T19:05:06","guid":{"rendered":"https:\/\/morpheustrading.com\/blog\/?p=6850"},"modified":"2022-04-06T15:04:56","modified_gmt":"2022-04-06T19:04:56","slug":"tsla-breakout-update","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/","title":{"rendered":"Trade Update: $TSLA Gain Now +38% Above Our Buy Entry"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"640\" height=\"477\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/Tesla.jpg\" alt=\"$TSLA cybertruck\" class=\"wp-image-6880\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/Tesla-110x82.jpg 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/Tesla-300x224.jpg 300w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#Tesla_got_investors_pumped_when_shares_recently_broke_out_above_1000_while_were_still_holding_TSLA_from_the_800_level_Here_is_an_educational_recap_of_the_original_Tesla_trade_setup_and_an_update_on_how_we_have_been_managing_the_winning_trade\" >Tesla got investors pumped when shares recently broke out above $1,000, while we&#8217;re still holding $TSLA from the $800 level. Here is an educational recap of the original Tesla trade setup, and an update on how we have been managing the winning trade.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#How_we_identified_Tesla_as_a_potential_buy_entry\" >How we identified Tesla as a potential buy entry<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#Initial_trade_criteria_for_buy_setups\" >Initial trade criteria for buy setups<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#Relative_strength_identifies_leadership\" >Relative strength identifies leadership<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#Technical_analysis_of_TSLA_buy_entry\" >Technical analysis of $TSLA buy entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#Tesla_enters_our_radar\" >Tesla enters our radar<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#Time_to_buy_after_earnings\" >Time to buy after earnings<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/morpheustrading.com\/blog\/tsla-breakout-update\/#Management_of_a_winning_trade\" >Management of a winning trade<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tesla_got_investors_pumped_when_shares_recently_broke_out_above_1000_while_were_still_holding_TSLA_from_the_800_level_Here_is_an_educational_recap_of_the_original_Tesla_trade_setup_and_an_update_on_how_we_have_been_managing_the_winning_trade\"><\/span>Tesla got investors pumped when shares recently broke out above $1,000, while we&#8217;re still holding $TSLA from the $800 level. Here is an educational recap of the original Tesla trade setup, and an update on how we have been managing the winning trade.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In our May 6 blog post, <em><a href=\"https:\/\/new.morpheustrading.com\/blog\/tsla-cup-handle-breakout\/\">Trade Alert: $TSLA Breakout From Cup With Handle<\/a>,<\/em> we said we were planning to buy &#8220;$TSLA on a rally above the $800 level.&#8221; <\/p>\n\n\n\n<p>Tesla ($TSLA) triggered our buy entry in the <em><a rel=\"noreferrer noopener\" aria-label=\"Wagner Daily (opens in a new tab)\" href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\">Wagner Daily<\/a><\/em> model portfolio shortly thereafter. Subscribers who followed the trade are currently showing an unrealized gain of approx. +38% since then.<\/p>\n\n\n\n<p>Now, we are following up with a technical chart review of the Tesla setup that led to that gain.<\/p>\n\n\n\n<p><em>Continue reading<\/em> to also learn how to detect similar bullish chart patterns that will help you find the next explosive mover!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_we_identified_Tesla_as_a_potential_buy_entry\"><\/span>How we identified Tesla as a potential buy entry<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Initial_trade_criteria_for_buy_setups\"><\/span>Initial trade criteria for buy setups<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In a bull market, we focus on trading leading growth stocks that have the potential to generate solid gains of <em>at least <\/em>20-40%  over a 4-12 week period. <\/p>\n\n\n\n<p>We are trend traders at heart, so our trade setups should always be in stocks that are showing <em>bullish momentum on their daily charts.<\/em>  <\/p>\n\n\n\n<p>A few moving averages help us screen for initial candidates. Specifically, we  look for trending stocks that are above their 50-day moving averages, <em>and <\/em>where the 50-day MA is above the 200-day MA. <\/p>\n\n\n\n<p>This basic scan helps to filter out stocks that are not already in an established uptrend.  <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relative_strength_identifies_leadership\"><\/span>Relative strength identifies leadership<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In a strong market, we also want to be in stocks that are performing better than the S&amp;P 500&#8211;<em>especially<\/em> when the S&amp;P is just beginning to recover off its low. <\/p>\n\n\n\n<p>Plotting a simple Relative Strength line helps us identify potential leadership. Pure price momentum, such as a large percentage move off a recent low, is also a key factor in analysis of potential trade setups.<\/p>\n\n\n\n<p>In addition to being in a strong uptrend, we also liked that Tesla is an extremely liquid stock capable of large percentage moves. There are not many of these stocks in the market, so it&#8217;s a good idea to monitor such stocks for potential entry after finding them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Technical_analysis_of_TSLA_buy_entry\"><\/span>Technical analysis of $TSLA buy entry<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Below is a $TSLA daily chart below shows the exact entry points in our <a rel=\"noreferrer noopener\" aria-label=\"swing trading report (opens in a new tab)\" href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\">swing trading report<\/a> model portfolio, followed by our detailed commentary on the trade setup. <\/p>\n\n\n\n<p>With both buy entries, we placed protective stops beneath the prior two-day lows:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"860\" height=\"896\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA1.png\" alt=\"\" class=\"wp-image-6852\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA1-106x110.png 106w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA1-288x300.png 288w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA1-768x800.png 768w\" sizes=\"auto, (max-width: 860px) 100vw, 860px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tesla_enters_our_radar\"><\/span>Tesla enters our radar<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Tesla stock began breaking out above its downtrend line in early April. This was a positive sign, <em>but<\/em> $TSLA was still below its 50-day MA at the time. This means the setup was not yet actionable for our rule-based trading system.<\/p>\n\n\n\n<p>But in late April, $TSLA powered through its 50-day MA on a massive gap higher, on its way to a +130% rally off its lows and into the April 29 earnings report. <\/p>\n\n\n\n<p>Along with the impressive percentage move off the lows, we also noted the relative strength line was setting a new high ahead of price (bullish). <\/p>\n\n\n\n<p>Nevertheless, the massive rally ahead of earnings meant the Tesla trade setup was <em>not yet actionable<\/em> for our system.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Time_to_buy_after_earnings\"><\/span>Time to buy after earnings<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>After earnings were out of the way (with an initial negative reaction), we began to closely monitor the price action for a low-risk buy point.<\/p>\n\n\n\n<p>After the price reclaimed near-term support of its 10-day MA, we alerted subscribers of our initial $TSLA buy entry on May 5.  <\/p>\n\n\n\n<p>Due to constructive price action after the first buy entry, we added to the position on May 15 (on a pullback to the 10-day MA).  <\/p>\n\n\n\n<p>Since we knew Tesla had the potential to be a strong market leader, we were not looking for &#8220;perfect&#8221; price pattern to trigger these buy entries.  Rather, we simply wanted to locate buy entries near a moving average (that was in play), and with relatively tight stops.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"954\" height=\"895\" src=\"https:\/\/new.morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA2.png\" alt=\"\" class=\"wp-image-6854\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA2-110x103.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA2-300x281.png 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2020\/07\/200701TSLA2-768x721.png 768w\" sizes=\"auto, (max-width: 954px) 100vw, 954px\" \/><\/figure>\n\n\n\n<p>$TSLA did not explode immediately after our buy entries, but we were fine with that. In some cases, it is important to be patient with a long entry&#8211;as long as the price does not do anything wrong. <\/p>\n\n\n\n<p>Bullish momentum started picking up after Tesla cleared the $850 level, enabling it to surge higher.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Management_of_a_winning_trade\"><\/span>Management of a winning trade<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As annotated on the chart above, we sold half of our position for a 20% gain on June 12. We continued holding the other half in anticipation of a larger move.<\/p>\n\n\n\n<p>On June 30, we added back to the position after $TSLA moved above its short-term downtrend line and blasted through $1,000 on higher than average volume. <\/p>\n\n\n\n<p>With healthy price action and no clear reason to sell, we remain long $TSLA with a +38% unrealized gain (as of July 1) from the original May 5 entry.<\/p>\n\n\n\n<p>We also continue to hold several other leading breakout stocks with solid unrealized gains: $TTD +30%, $LVGO +18%, and $TWLO +15%.<\/p>\n\n\n\n<p><strong><a rel=\"noreferrer noopener\" aria-label=\"Subscribe now (opens in a new tab)\" href=\"https:\/\/morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\"><em>Subscribe now<\/em><\/a><\/strong><em> to The Wagner Daily rep,ort and be instantly alerted to the next explosive growth stock we enter (and find out when we eventually lock in profits on Tesla).<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tesla got investors pumped when shares recently broke out above $1,000, while we&#8217;re still holding $TSLA from the $800 level. Here is an educational recap of the original Tesla trade setup, and an update on how we have been managing the winning trade. In our May 6 blog post, Trade Alert: $TSLA Breakout From Cup [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-6850","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6850","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=6850"}],"version-history":[{"count":16,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6850\/revisions"}],"predecessor-version":[{"id":7546,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/6850\/revisions\/7546"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=6850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=6850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=6850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}