The monthly chart of Tesla Inc (tsla) shows the stock skyrocketing 150% since breaking out of its sideways movement from the resistance of $387. It reached a peak of around $967 in under three months!
After reaching that peak, it has fallen to its current price of $748.
From its current position, strong long term support can be seen around the $387 level – a 48% drop from the current value. The nearest resistance can be seen at the recent high of $967 – a 30% reward from current levels.
Given that the recent strong bullish move was quite extraordinary, and the fundamentals backing this move also seem unique – the fact that Tesla is yet to be making any profits at all, but has a massive future potential both short and long term (a bit in the speculation realm) – we cannot discount the stocks potential to swiftly break the previous high to form even greater highs.
Nevertheless, black-and-white technical analysis indicates the current risk:reward ratio and the nearest long term support and resistance as shown in the chart above.
The daily chart shows potential technical support around the $688 level followed by the $590 level. The 50- and 200- period moving averages may also serve as potential support levels.
Technical analysis shows that TSLA is currently in an uptrend. From the directional movement index (DMI) indicator on the monthly chart above, for the long term, it is potentially a ‘young uptrend’ shown by the recent divergence of the +DI (green line) from the -DI (red line) and the newly up sloping of the ADX (black line) which has only just crossed above the -DI.
In the shorter term though, it is possible that the stock may consolidate first (although not necessarily) which may provide an opportunity for new entries.
Both long and short term traders as well as investors may look to the support and resistance levels shown above as well as the moving averages as potential entry points either for new entries or for averaging existing positions.