Here's A Look At Tesla Stock As S&P 500 Plunges, Crypto Sector Crashes

Tesla, Inc TSLA was slipping over 5% lower on Monday after a drop of more than 9% over the course of Thursday and Friday.

The Elon Musk-owned EV giant is affected by the general markets and if the cryptocurrency sector continues to crash, Tesla’s Bitcoin investment could negatively impact its second-quarter earnings, expected to be printed in July.

Tesla’s slide on Monday caused the stock to break down bearishly from a falling channel pattern on the daily chart.

The pattern is bearish for the short term, but can be bullish down the road if the security remains within the parallel trendlines. When a stock breaks down from a parallel channel, it indicates a strong period of weakness could occur.

• For bearish traders, the "trend is your friend" (until it's not) and the stock is likely to continue downwards. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
• Bullish traders will want to watch for a break up from the upper descending trendline, on high volume, for an entry. When a stock breaks up from a descending channel, it's a powerful reversal signal and indicates a rally is likely in the cards.

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The Tesla Chart: Tesla began trading in a falling channel pattern on May 27 and tested the upper trendline as resistance on June 2 and June 9 and the bottom trendline as support on June 3 and June 7. On Monday, Tesla broke down through the bottom descending trendline and when the stock tried to pop back up into the pattern, Tesla rejected the area, indicating the pattern was recognized by the algorithms.

• Tesla is also trading in a confirmed downtrend, with the most recent lower high printed on June 9 at $766.64 and the most recent confirmed lower low formed at the $690.28-mark on June 7. If Tesla closes the trading session near its low-of-day, the stock will print a bearish kicker candlestick pattern, which could indicate lower prices will come again on Tuesday.
• If the stock is able to rise up to close the trading session with a lower shadow, Tesla will print a hammer candlestick, which could signal the next low is in, and the stock will bounce on Tuesday. If that happens, Tesla may negate the downtrend and possibly begin trading in a symmetrical triangle pattern to form a period of consolidation before its next move.
• Tesla is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. Both moving averages are also curling down, which suggests a continuation to the downside over the coming days.
• Tesla has resistance above at $671.64 and $700 and support below at $650.81 and $628.35.