Normally, when we look for trades, we look for set-ups on a higher timeframe because those are a bit more trustworthy as the rest of the market can see them more clearly. However, for our trade today we have zoomed in a bit on the 5 minute chart for Tesla (TSLA) to highlight the pattern we see there.

What we have is an uptrend moving into a triangle, which if we trust this uptrend, it implies a move higher. However, we have to remember the weakness of the overall market, particularly in the tech sector.

A trader such as yourself could get in this trade anticipating a pop higher, but there are no guarantees in trading. The higher probability trade would be to wait for a break and hold above these trend lines in order to get added confirmation of the stocks directional move.

This lie and wait approach would also apply to the downside of this trade, as well. A break and close below the bottom trend line would imply the opposite trade would be confirmed and a move lower could be imminent.

Either way, this is another great trade as this pattern is bound to have price break out or break down out of it very soon. Keep this one close on your watchlist, TSLA, for those who are familiar has the ability to make a big move.

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Good Luck With Your Trading!

Christian Tharp, CMT