The road of Tesla’s stock price has twisted and turned like a roller coaster, up an astounding 75% since the fiscal .
Starting its ascent amidst Elon Musk’s promise of a more accessible model to counter China’s BYD threat, the rally gained speed with unveilings like the Tesla Bot and approvals for Robotaxis in California and China.
Recent high-octane news like China officially listing Tesla cars for purchase for the first time fuels expectations of boosted revenues.
This development might also defuse tensions over China’s data security concerns, potentially opening previously restricted zones to Tesla vehicles.
With another 25% surge in the past trading week, Tesla’s stock has clawed back into positive territory for the year.
As investors ride this whirlwind, they’re left wondering – At what altitude will this soaring flight level out?
Examining the technical indicators might offer some breadcrumbs on navigating this high-flying trajectory.
A Bumpy Road to Recovery
In early 2024, Tesla hit bumps with production and delivery woes, leading to a nosedive in its stock, plummeting over 45% in the initial four months and dipping below $140 by the week of April 22.
But a bouncing back happened swiftly, spurred by contrarian moves. The tide turned with the April 23 earnings report becoming a launchpad for the rebound.
Despite prevalent pessimism, InvestingPro’s crystal ball showed a $188.4 price target back in April, hinting at a nearly 20% upside in the short run.
Fast forward, the rally has surged and the price target has risen, with InvestingPro’s Fair Value guide now whispering a 10.5% downside potential.
If you had been following our Fair Value roadmap, you would be bathing in the glow of profits now.
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Navigating Peaks and Valleys
Post the Q1 earnings report hinting at a turnaround, Tesla capitalized on positive developments to beef up its momentum.
The weekly chart reveals the stock breaking free from its downward spiral recently.
After knocking thrice on the upper channel’s door in the past year, Tesla defied the trend this time by smashing through the ceiling.
Eying the year-long momentum, TSLA now dances above the Fib 0.618 level, akin to $238 on the scale. This marks a critical support juncture for the stock.
A significant roadblock looms at $265 (Fib 0.786), a decisive resistance threshold. A breach with vigor or sustained weekly finishes could signal a continued bullish dance towards the $350-400 domain, nearing historical high-water marks.
But brace for potential profit-booking as traders might cash in post the dizzying climb, a standard move after a significant breakout in technical terms.
In such a scenario, a pullback to an average of $220-230 beckons. Interesting to note, this band harmonizes with InvestingPro’s ongoing fair value prognosis.
The Final Turn
Tesla’s ride upward hinges on retracing towards the supportive turf before testing the $260 resistance and holding steady.
A short-term slip in Tesla’s valuation could ease the overbought condition marked on the Stochastic RSI across daily and weekly charts, nurturing a technically sound ascent.
Augmenting Tesla’s merry momentum is the short-term Exponential Moving Averages (EMA) trumping the long-term EMA on the weekly chart.
Nevertheless, a close below $220 during a potential fallback could trip the bullish vigor. This could steer TSLA south of $200 soon.
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Disclaimer: This text is for informative ends only; not a sales pitch, guidance, wisdom, or a call to invest, thus excludes any inducement for asset purchase. Remember, assets are risky and multifaceted, so investment decisions are solely your responsibility. Dive at your own risk.
