Tesla (TSLA) stock is rolling over again on Monday. At the session low, shares were down 5.2% and were hitting new 52-week lows in the process.
While the rest of mega-cap tech is holding up okay on the day, the group has been under severe selling pressure as of late.
As it relates to Tesla, the stock reacted poorly to its third-quarter delivery results in early October, then reacted poorly to earnings on Oct. 19.
While the stock has been able to muster up some rallies over the last five weeks, the broader price action has been dominated by the bears.
Shares are now clinging to a key support area as the stock rotates below the October low of $198.59 — giving traders a monthly down rotation if the stock can’t regain this level.
If that’s the case, it could have bulls watching two areas very closely as potential buying opportunities.
When to Buy Tesla Stock
When looking at the chart above, it’s clear that the $200 to $205 area has been a huge support zone for Tesla stock.
Shares are cracking below that area now, but if the stock can bounce and regain that area, then it’s possible for traders to ride Tesla higher in the short term.
However, the bigger opportunity for longer term investors rides with a larger move to the downside.
Specifically, the $182 to $187 zone has resulted in two major bounces for Tesla stock in 2021. The first led to a 44% bounce. The second kickstarted the stock’s run to all-time highs, as shares ultimately rallied more than 125% from this zone.
If we see a retest of it, aggressive buyers will again look for rebound. Below that and things get interesting.
The $167.50 area is somewhat attractive, as it was technically a breakout point on the chart. But if we can somehow see a flush into the $150s, a much more attractive entry may present itself.
Admittedly, it would have to take place in the next few weeks — or else the measures we’re looking at will continue to track higher — but as it stands, the 200-week and 50-month moving averages sit between $150 and $160. So does the monthly VWAP measure.
Let’s also not overlook the ~$150 breakout level from 2020.
While I’m unsure of whether we’ll see a dip into the $150 to $160 area, it’s a zone to watch for long-term investors.