Digesting The Highs & Tesla S&P 500 Inclusion
By Bennett Tindle November 17th, 2020
If you’ve been following my work, you know that I’m bullish. In fact, coming off the September 2nd highs, and following a rather sharp 10% correction in the S&P 500, I suggested we were gearing up for new highs either into or directly following the November elections. Well, the S&P 500 ended the session yesterday with a new record closing price of 3626.92! But we aren’t out of the woods just yet… and still technically remain in correction. That said, hold onto your hats — I think we’re gearing up to blow the roof off of this pattern and rally significantly higher in the indexes.
Another interesting piece of news out yesterday was in regards to Tesla finally joining the big-boys in the ranks of the S&P 500! Tesla will be joining the Consumer Discretionary sector, and inclusion will begin on December 21st. Price action directly following the announcement after hours was rather bullish, however giving up much of the gains during the cash session today. Although we view the initial move as a likely head-fake, or false breakout due to over-reaction, we remain extremely bullish and expect this stock to get back on its horse very soon. Looking at the charts you will see a sideways consolidation pattern that began on September 1st. Remember — stocks are not supposed to go up or down in straight lines! In fact, we view this as an extremely healthy consolidation that is conducive to additional growth. Tune in as we dive into the chart, noting our breakout trigger point of $465.90.