Hot zone alert - May 6 2025
Your weekly guide to the the most promising trade setups in stocks, crypto, and currencies
Another week, another Zone Alert!
First off, a quick reminder to any of you out there still not a part of our beta—you can still test our new online platform and harness the power of the Zone Algo for free:
Inside, you’ll be able to:
Find the most actionable setups for the day/week
See each stock’s key support and resistance zones
Adjust the scanner’s settings to suit your trading needs
Now onto our top picks for the week.
New here? Welcome to Zone Alerts.
This is where we highlight stocks that are approaching key support and resistance zones and analyze where the action might lead.
These weekly alerts help you zero in on high-potential setups while keeping risk management in check.
What’s in this issue:
• This week’s three new hot zones
• What are zones?
Tesla Inc. (TSLA)
Consumer Cyclical • Auto Manufacturers • USA • NASD
View the chart
Let’s dive right into a setup that’s already in the works.
After a sh*tshow start to the year, TSLA seems to have finally been able to stop its bleeding.
For the past couple months, the stock has been chopping around in between its February 2023 and January 2021 zones—a range that has consistently delivered 10-30% returns literally every step of the way.
Right now, TSLA is in the early stages of another rejection from resistance, with yesterday’s red candle acting as a solid bounce confirmation.
Moreover, this most recent rally has shown some signs of exhaustion—as evidenced by the declining volume during this rally.
As of writing, price has already slid about 5% from the resistance zone—but there’s still a lot of runway left in this play.
With the December 2020 zone as the first potential target, a short here could net about 13-17%.
Evergy Inc. (EVRG)
Utilities • Utilities - Regulated Electric • USA • NASD
View the chart
Similar to our first alert, EVRG is a stock that has also been stuck in a well-defined zone channel for a while.
But unlike with TSLA, we’re still a little early to this setup. And that’s actually key here—because this is a stock that tends to take the express way down.
And that elevator could be coming soon.
Apart from facing a zone that has almost never been penetrated…
EVRG is also looking at fading volume, plus bearish divergences on both RSI and MACD.
Riding another bounce down to the September 2019 support zone could offer a quick 6-8% gain.
Westlake Corporation (WLK)
Basic Materials • Specialty Chemicals • USA • NYSE
View the chart
That huge gap down you’re seeing is the result of a surprisingly poor Q1 earnings report from WLK—which effectively ended the mini-rally it’s been attempting.
The stock is now trading at levels not seen since mid-2021… and is right back at a support zone that hasn’t broken since.
On top of that, WLK’s selling volume—while still unusually high—has calmed down a bit since Friday. RSI has also dipped back down to oversold territory, and is showing signs of a bullish divergence.
All signs are pointing toward a possible bounce here… but we’ll still need to see a bullish candle to confirm.
This is a pretty significant move up if ever—15-20% upside if it makes it to the September 2014 zone.
WTF are Zones, anyway?
Zones are key price levels where the market has reacted strongly in the past—such as sharp reversals or sudden swings.
They’re areas where actual supply and demand met in the past, and likely will meet again.
“Why are these significant?”
Well, it all comes down to three key principles. We like to call them The Principles of:
When I Dip, You Dip, We Dip (aka psychology)
Traders are aware that others are watching these levels (zones) too. With everybody paying attention, this creates a self-fulfilling prophecy where everybody acts in anticipation of everybody else’s actions.
Markets Gonna Market ¯\_(ツ)_/¯ (aka technical factors)
If the first price rejection at the top of a zone was violent, it’s likely that buyers who entered at that level are now holding losses.
But with each retest, the rejection weakens, as there are fewer buyers remaining underwater. This weakens that resistance (or support for all you short-sellers), and could eventually lead to a break through.
Killer Whales (aka institutional plays)
Big players need liquidity in order to place massive orders without moving the market against themselves. So they wait for these zones, knowing a lot of us small fry (retail traders) will come to play.
This allows them to buy low or sell high without causing a lot of waves.
But remember: Zones are NOT guarantees but rather regions of increased probability for market moves. So always, ALWAYS use proper risk management.
Trading Places: Launch coming soon!
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Stay tuned!
Disclaimer: This isn't financial advice. This shouldn’t be news to you.