.

Swing Trade Idea (TSLA) – August 02, 2022

Our bearish trade for Tuesday, August 2nd is Tesla Inc. (TSLA). TSLA is part of the Consumer Discretionary sector, which had a strong rally towards the top of a trendline within a trading channel, from where it is expected to trade lower.

TSLA recently rallied to a long-term key resistance level, which is at the 200 Day Moving Average, at $900. It is expected to trade lower as it is currently in an over-bought condition. This provides a good risk/reward bearish entry. 

As a close, if TSLA were to trade above $950 for multiple days, this would invalidate our analysis and consider cutting losses on the trade. We also will consider cutting losses on this options trade if the value of the vertical spread moves above $82.20.