Shares of Tesla Inc. made history Monday, but it might not be the good kind.
The stock is very overbought. This means it has reached extremes above what would be its typical or average trading range. This is important because overbought stocks tend to sell off.
The lower half of the below chart shows the RSI Momentum Indicator. It measures how far Tesla’s stock has moved in a short period of time. When the indicator reaches high levels it shows overbought conditions.
As you can see on the chart, the RSI reached its highest level ever. Stocks don’t usually make history, but when they do, it’s time to pay attention. Tesla may be about to reverse.
By Mark Putrino
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