Tesla Building A Large Base And May Be Ready To Resume Another Strong Uptrend
Tesla was undoubtedly the darling and leader of the 2020 bull market. From May 2020 until early 2021, it more than tripled as it headed higher week after week and month after month. Since January, it has been building a large, multi-month base. These type of bases often tire out buyers as their frustrations start to mount. What intrigues me about Tesla here is that it is no longer the talk of the town. No one seems to care about it anymore whereas everyone had to own it in late 2020. Huge bases like this coupled with a lack of media coverage often offer enormous opportunities.
At its' current levels, TSLA is shaping up with a fantastic risk to reward ratio, as the 10-week and 40-week lines lie just below. Should Tesla emerge above recent resistance levels on strong volume, it could definitely resume a strong uptrend again. I've noticed over the past few weeks many of the "old guard" stocks from 2020 are starting to set up again. Amazon, one of the first stocks to emerge in April 2020, is now trading over $3,700 after breaking out from a huge multi-month base. Shopify and CrowdStrike are also sporting impressive charts. It is very possible that we might be seeing some rotation back into some of the monster winners of 2020. If that theme continues, it bodes well for Tesla, the true leader of last year's bull run.
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