Another good day for $SPX and a buy signal from $TSLA

By Jani Ziedins | End of Day Analysis

Mar 31

Free After-Hours Analysis: 

After spending most of Wednesday at record levels, the S&P 500 pulled back modestly at the end of the day and just missed a record close by a measly 2 points. Close, but no cigar.

While it is never helpful to see a stumble into the close following a push to fresh highs, the market deserves a pass this time. Wednesday was the final day of the first quarter and some institutional investors move things around for housekeeping and reporting purposes. This window dressing isn’t significant and doesn’t mean anything. I won’t give this late fizzle a second thought as long as the selling doesn’t continue Thursday.

At this point, the market is in good shape and passing through 4k seems inevitable, if for no other reason than the market tends to go where everyone is looking.

It’s taken the market nearly two months to go from 3,900 to 4k. That’s a very reasonable amount of time and cooled off some of our previous “overbought” conditions. Sometimes markets rest by pulling back, other times they rest by trading sideways.

This sideways consolidation hasn’t been long enough to support a dramatic rally, but we are on pace for a continued grind higher. As long as we keep getting more up than down, everything is going according to plan.

TSLA has done a really nice job bouncing off of $600 support. As I wrote on Friday:

$600 is our line in the sand. Above support and TSLA is buyable. Under support and it becomes shortable. It doesn’t get any more straightforward than that.

If anyone was fortunate enough to be reading this blog back in February and locked in some nice profits near $800, this is a good place to be adding some of that money back. Place a stop under $600 and see where this bounce goes.

That said, be wary of any retreat back under $600, especially so quickly after bouncing off of support. If dip buyers don’t show up and this falls under $600 over the next few days or weeks, that shows demand is a problem and lower prices are ahead. And the scary thing is there is a lot of clear air between $600 and $400 support.

But that is simply a contingency. As long as TSLA remains above $600, all lights are green.

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About the Author

Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.