Tesla stock has fallen 14% over the past five days.

"Caution) For trend follow-up study records. Not a buy-and-sell recommendation."

Tesla stock has fallen 14% over the past five days.
(358.64$ => 307.89$)

Before that, Tesla rose 69% in 18 days from Oct. 23 to Nov. 11. (212.11$ => 358.64$)

"It's a plunge after a surge."

Principle: A surge occurs when the stock price rises rapidly due to positive news, expectations, or an inflow of liquidity. However, after that, the possibility of a sharp drop increases due to the resolution of overheated buying and profit-taking. It occurs when supply and demand no longer supports a strong resistance line.

How to respond: After the surge (when the base breaks up by more than 15-20%), refrain from pursuing purchases (brain trading), and clearly set up the position held as appropriate, and when entering, only a small amount is also canceled.

[The book is a reference]

When the stock price shows significant weakness, it may be said that your pride should hold out. In that case, you will decide to 'wait until the stock price rebounds', but if there is a signal in the meantime, you should never ignore it. If you hold out even though the signal is out, you are simply exposing yourself to unnecessary risks. As an aircraft unexpectedly passes through a lean air pocket, it is more likely to experience a sharp drop in prices. It is highly likely that it will fall sharply and rapidly from high prices as trading volume surges. If this happened, as large players flee in droves, individuals cannot respond to a tsunami of institutional selling, so this should be seen as a significant selling signal. This often happens even though there is 'good' news with an earnings report. Investors are often confused by this gap, which appears to be good news but results in a sharp sell-off. I can't understand why the stock price is going down because I think it needs to go up. As I explained earlier, this could be a case of a 'difference disclosure'.

It's... it's... it's... it's... it's...

In any case, when the stock price drops significantly, it is not a buying opportunity. Many investors are caught in the trap as follows. When the stock you hold suddenly falls, the market is wrong, and I think you should buy more, believing that this stock is a well-earned stock. I don't think the stock price drops because institutional investors know that something is wrong (at least suspicious). If you find this phenomenon, you should leave. This selling signal can occur without warning, but in many cases, you will see a number of "selling violations" building up. If you didn't have the courage to sell when the stock price was strong, you should be wise in this case and sell immediately.

Think and trade like a champion, Mark Minervini