Looking at this 4HR chart, we can clearly see an Inverse Head and Shoulder pattern forming. It is currently at the neckline right at around $198.
Interestingly, we see a Bearish divergence right near the neckline (as marked) where price action is going up, but the RSI is going down. This gives us a small bearish signal.
So unless this gets invalidated by a candle breaking and closing above 198.24, we are most likely going down to the $166 - $164 area. That will be the decider area where TSLA can either bounce back and complete the Inverse H&S or it breaks down and goes for lower price support levels. (which I will update later).
Possible trades (options) that can be taken:
Option 1:
Feb 17th $195 PUT at around
Option 2:
Feb 17th $160 PUT (risky)
Option 3 (Put Spread):
Leg 1: Buy Put 2/24 $165
Leg 2: Sell Put 2/17 $165
(Good R:R ratio). Please feel free to message me if you are new to options or are confused.
Option 4 (Butterfly) - Risky but high reward:
Leg 1: Buy Put 2/17 $185 (1 Qty)
Leg 2: Buy Put 2/17 $145 (1 Qty)
Leg 3: Sell Put 2/17 $165 (2 Qty)
Note: This whole will be a single order. Again, please feel free to ask in comments or message me if you are confused.
These are the potential option trades that can be taken next week.
For a stop loss look for 198 area to break. If the price goes above that and closes we must exit the position in a loss. Other ride it till 165. Make sure to exit if you're in a good enough profit (according to you).
Do you own research before taking this trade.
Let me know what you guys think :)
Happy Trading!