Tue. Jan 25th, 2022

Car stocks have been news for the attraction of everyone driving electric vehicles. A year ago, I started writing about the topic of electric cars and the race to lead.

1934 TerraplaneAfter TSLA reached the top of the mountain in the spring, the main stocks of the industrial group have not done much. Even Elon’s charm seems like it can’t heat up the buy button for investors. It’s a good time to check stocks. Tesla made a daunting run in 2020 and, in the first part of September, split the shares 5: 1. That would put the shares at $ 2500 before the split and $ 500 after splitting the new shares. The shares cooled sideways for 2 months and hit the mountain road again for a final $ 900 attack after joining the S&P 500, making Elon one of the richest men in the world. world.

But it also captured the enthusiasm of the youth investor, the millennial investor, the ESG investor, the awake investor, the future investor and the index investor.

Anyone who doubted Tesla at the top was just an idiot. Seven months after such tumultuous days in January, stocks continue to rest on the 200-day moving average in green, about $ 200 off the all-time highs. This little green line supports the actions for four months. Why is this line so important?

For computer programmers, a simple definition for a stock in a long-term uptrend is to be above the long-term average. Institutions also like to have stocks above the long-term average and be more careful when stocks are below average.

There is still talk of Tesla’s future and troop leader Elon mentioned that the company has 12 individual startups turned into a single company. What does it mean? The ever-present promise of autonomous driving software, battery technology, the sophistication of electric motors, charging stations and domestic charging stations are all part of the attraction that keeps investors in the stock market.

When the weekly chart is shown, the weekly momentum (PPO indicator) is close to zero, but increases. I’ve mentioned it many times before, but strong actions maintain a positive momentum. Therefore, Tesla is currently paralyzed, with the PPO momentum indicator remaining just above zero and just above the signal line. For me, these are very important signals that need to be maintained.

The Ford (F) brand launches its electric pickup and my Twitter feed shows me the same ad over and over again. If anyone can incorporate the power truck business, it should be the No. 1 truck brand. But investors see that these actions focus on electricity are starting to decline. Ford is breaking the strong upward trend of the last year and is now trying to find support in the long-term green moving average. In this case, it is the 40-week moving average, which is approximately equal to 200 days (40 weeks x 5 days = 200 days). Since both shares have fallen 6% this week with one trading day remaining, it’s a good place to make sure these electrical stocks hold up. The momentum for Ford’s PPO is falling sharply. He even has the Cramer effect on his side, but he can’t stand it.

For me, stocks are at an important turning point. In my weekly Cleantech newsletter, I look for opportunities to invest in the area. Recently, some of the names like BMW, Toyota and Honda were cheering. But this week’s wear seems to change all that.

That being said, as an investor, don’t get caught up in the hype of the future. The Terraplane company in 1934 lost $ 21 million a year trying to compete with Ford, Dodge, Packard, Cadillac and others. There were many investors who lost while betting on the future. While Tesla looks like the winner, at one point Ford was 80% of the world’s cars.

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Greg Quick

About the author:
Greg Schnell, CMT, is a senior technical analyst at StockCharts.com specializing in intermarket analysis and commodities. He is also a co-author of Stock charts for mannequins (Wiley, 2018). Calgary-based Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and president of the Calgary CSTA chapter. He is an active member of the CMT Association and the International Federation of Technical Analysts (IFTA). Learn more

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