Where Will The Tesla Selloff End?

Tesla, Inc. (NASDAQ:TSLA) shares are in free fall on Thursday. The company reported earnings, and investors didn’t like what they heard.

The downtrend may continue. This is why Tesla is the Stock of the Day.

• How is TSLA stock doing now?

Markets are driven by supply and demand. When there are more shares for sale than buyers willing to purchase them, sellers are often forced to undercut one another by lowering their asking prices to attract buyers.

This forces the shares into a downtrend.

When a stock reaches a support level, the dynamic changes. There are large amounts of shares to be purchased. Downtrends end or pause when they reach support levels.

People who wish to sell can do so without forcing the price lower.

If a stock trades and stays below a support level, traders say the support has been broken. This can be a bearish dynamic.

It shows the investors and traders who created the support with their buy orders are gone. They have either finished or canceled their orders.

With these buyers out of the market, sellers will be forced again to undercut each other and offer their shares at discounts. This can create a new downtrend.

As you can see on the chart, the $372 level was support for Tesla in May and June. This support broke yesterday, and a large move lower followed this morning.

There was support around the $343 level. Today’s move broke this support, and the shares continue to trend lower.

If they keep dropping, there is a chance there is support around the $286 level. This level was support last July, and there tends to be support at levels that were support previously.

This happens because of remorseful or regretful sellers. Some of the people who sold at the support have regretted doing so ever since. A number of them vowed to buy their shares back at their selling price if they eventually could.

This means there could be support at this level. It could be where the selloff ends.