Tesla's Volatility Climax: Is The Dead Cat Bounce Already Dead? Detailed 24-Hour Bearish Playbook

Step 1: Global Trend Analysis

Price Structure

Examining the daily chart from February 6, 2025, through June 6, 2025, TSLA moved from highs above $370 down to the recent close at $295.14. The price experienced a strong multi-week uptrend from the $220–$230 lows in mid-March, culminating in a May peak near $367. In early June, however, TSLA experienced a sharp decline, closing at $284.70 on June 5 (almost 10% down with historic volume of 292M). This high-volume move signals a sharp correction or possible panic selling. The subsequent bounce on June 6 took TSLA to intraday highs above $305 before settling at $295.14.

Trend Status

• The sudden collapse from ~$340 to ~$285, with historic volume, indicates either fundamental news, an earnings miss, or an external shock. Such selling climaxes often set up strong reactive bounces, but they may lead to new downtrends if buyers fail to sustain prices.
• Although the bounce on June 6 was strong, the inability to close above the $300 psychological barrier makes follow-through questionable.

Step 2: Candlestick & Chart Pattern Analysis

• June 5: A massive bearish candle on abnormal volume—clear sign of distribution/panic.
• June 6: The price opened with a gap-up recovery, attempting to reclaim lost ground, trading as high as $307.9 but rejected above $305, closing below $300 and ultimately at $295.14—a high-wave candle with long upper and lower shadows.

This is a possible dead cat bounce—often seen after panicked sell-offs, with price unable to close in the upper third of the daily range.

Step 3: Support/Resistance Identification

• Immediate support: $284–$290 (recent lows)
• Next supports: $275 (May 3-7 support cluster), then $262 (late March/early April congestion)
• Resistance: $305–$307 (intraday highs), then $320, then $340
• If price reclaims $305 and holds, next upside target could emerge. However, sellers are in control below here.

Step 4: Volume Analysis

• Volume Climax: June 5 saw nearly 300M shares traded (compared to an average ~100M), confirming a washout or exit of large holders. June 6 volume (total 160M) was also elevated but lower than the previous day, indicating some absorption and attempted bottom-fishing, but not decisive reversal buying.
• Intraday volumes show sharp activity around attempts to break $300–$305, with strong rejection above $305.

Step 5: Indicator Overview

1. Moving Averages (EMA/SMA):
   • The price is now well below the 20-day and 50-day SMA/EMA estimates (assuming trailing at ~$320 and $340).
   • Steep downside break suggests bearish regime in the near term.
2. RSI (Relative Strength Index):
   • After the plunge, RSI likely dipped below 30 (oversold) on June 5, now rebounding to around mid-30s. This signals short-term oversold but not yet reversing to a bull regime.
3. MACD:
   • MACD has crossed deep into negative territory with strong downward momentum, showing no clear bullish crossover yet.
4. Bollinger Bands:
   • June 5 close pierced the lower band, classic sign of a volatility event. June 6 price pulled back inside the band but failed to decisively reclaim the median, suggesting the bounce may be corrective.
5. ATR (Average True Range):
   • ATR is at recent highs due to the volatility spike. High volatility favors active traders but is dangerous for medium- and long-term entries until consolidation forms.

Step 6: Fibonacci Retracement Analysis

• From May highs (~$367) to June 5 panic low ($284.70):
  • 23.6%: ~$304
  • 38.2%: ~$316
  • 50%: ~$326
  • Price rebounded to just above 23.6%, but failed to close above—classic bear rally behavior. If unable to break and hold $305, next wave may retest panic lows.

Step 7: Short-Term (24h) Price Forecast

• Bearish Momentum dominates.
• The bounce attempt was capped at $305.
• Price closed near lows, and the market is likely to test $290 again. If that is breached, $275 is the next target.
• Upward scenario only triggers if $305 is reclaimed and held for a few hours—probability low, given the technical damage.

Step 8: Sentiment and Positioning

• Sentiment is weak after a major unwinding episode. Technicals align with a low-probability bounce and higher probability of continued pressure to the downside.
• No positive reversal signals yet—volume remains more distributional than accumulation.
• Put/Call activity (not shown, but inferred from price/volume) likely elevated, signaling bearish bets.

Step 9: Composite Conclusion

All methods point to further downside or at best, sideways consolidation with lower highs. Room for another leg lower to retest $284 and potentially pressure $275 if broader market or company news remains adverse.

Step 10: Trade Plan

• Position: Sell/Short
• Entry (Open Price): On a weak bounce toward $297–$300
• Target (Close Price): $285–$284 (recent lows)
• Stop Loss (not required but for reference): Above $305

Summary Table

Method	Signal
Trend	Down
Volume	Distribution
Candle Pattern	Dead Cat
RSI	Weak/Oversold
MACD	Bearish
Fib Levels	Not held
Support/Res	Downside open

Probability-weighted tactical trade is a short, opened near $297–$300, targeting $285.